Correlation Between CNFinance Holdings and UWM Holdings

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

By analyzing existing cross correlation between CNFinance Holdings and UWM Holdings Corp, you can compare the effects of market volatilities on CNFinance Holdings and UWM Holdings 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 CNFinance Holdings with a short position of UWM Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of CNFinance Holdings and UWM Holdings.

Diversification Opportunities for CNFinance Holdings and UWM Holdings

0.43

Correlation Coefficient

CNFinance Holdings  UWM Holdings

Very weak diversification

The 3 months correlation between CNFinance and UWM is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding CNFinance Holdings and UWM Holdings Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UWM Holdings Corp and CNFinance Holdings 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 CNFinance Holdings are associated (or correlated) with UWM Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of UWM Holdings Corp has no effect on the direction of CNFinance Holdings i.e., CNFinance Holdings and UWM Holdings go up and down completely randomly.

Pair Corralation between CNFinance Holdings and UWM Holdings

Considering the 90-day investment horizon CNFinance Holdings is expected to under-perform the UWM Holdings. In addition to that, CNFinance Holdings is 2.09 times more volatile than UWM Holdings Corp. It trades about -0.03 of its total potential returns per unit of risk. UWM Holdings Corp is currently generating about 0.01 per unit of volatility. If you would invest  564.00  in UWM Holdings Corp on December 28, 2024 and sell it today you would lose (2.00) from holding UWM Holdings Corp or give up 0.35% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

CNFinance Holdings  vs.  UWM Holdings Corp

CNFinance Holdings

Risk-Adjusted Performance

Very Weak

Over the last 90 days CNFinance Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unfluctuating performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

UWM Holdings Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days UWM Holdings Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound primary indicators, UWM Holdings is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with CNFinance Holdings and UWM Holdings

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

The idea behind CNFinance Holdings and UWM Holdings Corp 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.