Correlation Between Vince Holding and United Homes
Can any of the company-specific risk be diversified away by investing in both Vince Holding and United Homes at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Vince Holding and United Homes into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vince Holding Corp and United Homes Group, you can compare the effects of market volatilities on Vince Holding and United Homes and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Vince Holding with a short position of United Homes. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vince Holding and United Homes.
Diversification Opportunities for Vince Holding and United Homes
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Vince and United is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Vince Holding Corp and United Homes Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on United Homes Group and Vince Holding is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Vince Holding Corp are associated (or correlated) with United Homes. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of United Homes Group has no effect on the direction of Vince Holding i.e., Vince Holding and United Homes go up and down completely randomly.
Pair Corralation between Vince Holding and United Homes
Given the investment horizon of 90 days Vince Holding is expected to generate 6.69 times less return on investment than United Homes. But when comparing it to its historical volatility, Vince Holding Corp is 1.38 times less risky than United Homes. It trades about 0.02 of its potential returns per unit of risk. United Homes Group is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 20.00 in United Homes Group on November 2, 2024 and sell it today you would earn a total of 61.00 from holding United Homes Group or generate 305.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 93.71% |
| Values | Daily Returns |
Vince Holding Corp vs. United Homes Group
Performance |
| Timeline |
| Vince Holding Corp |
| United Homes Group |
Vince Holding and United Homes Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vince Holding and United Homes
The main advantage of trading using opposite Vince Holding and United Homes positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vince Holding position performs unexpectedly, United Homes can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in United Homes will offset losses from the drop in United Homes' long position.| Vince Holding vs. Ermenegildo Zegna NV | Vince Holding vs. Columbia Sportswear | Vince Holding vs. Gildan Activewear | Vince Holding vs. G III Apparel Group |
| United Homes vs. Minerals Technologies | United Homes vs. Avient Corp | United Homes vs. Olympic Steel | United Homes vs. Stepan Company |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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