Correlation Between Century Communities and SUPER HI

Can any of the company-specific risk be diversified away by investing in both Century Communities and SUPER HI 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 Century Communities and SUPER HI into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Century Communities and SUPER HI INTERNATIONAL, you can compare the effects of market volatilities on Century Communities and SUPER HI 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 Century Communities with a short position of SUPER HI. Check out your portfolio center. Please also check ongoing floating volatility patterns of Century Communities and SUPER HI.

Diversification Opportunities for Century Communities and SUPER HI

0.0

Correlation Coefficient

Century Communities  SUPER HI

Pay attention - limited upside

The 3 months correlation between Century and SUPER is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Century Communities and SUPER HI INTERNATIONAL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SUPER HI INTERNATIONAL and Century Communities 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 Century Communities are associated (or correlated) with SUPER HI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SUPER HI INTERNATIONAL has no effect on the direction of Century Communities i.e., Century Communities and SUPER HI go up and down completely randomly.

Pair Corralation between Century Communities and SUPER HI

Considering the 90-day investment horizon Century Communities is expected to generate 0.61 times more return on investment than SUPER HI. However, Century Communities is 1.64 times less risky than SUPER HI. It trades about -0.05 of its potential returns per unit of risk. SUPER HI INTERNATIONAL is currently generating about -0.03 per unit of risk. If you would invest  7,545  in Century Communities on December 20, 2024 and sell it today you would lose (530.00) from holding Century Communities or give up 7.02% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Century Communities  vs.  SUPER HI INTERNATIONAL

Century Communities

Risk-Adjusted Performance

Very Weak

Over the last 90 days Century Communities has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable fundamental indicators, Century Communities is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

SUPER HI INTERNATIONAL

Risk-Adjusted Performance

Very Weak

Over the last 90 days SUPER HI INTERNATIONAL has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest inconsistent performance, the Stock's fundamental indicators remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

Pair Trading with Century Communities and SUPER HI

The main advantage of trading using opposite Century Communities and SUPER HI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Century Communities position performs unexpectedly, SUPER HI 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 SUPER HI will offset losses from the drop in SUPER HI's long position.

The idea behind Century Communities and SUPER HI INTERNATIONAL pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.