Correlation Between Dream Finders and Bill

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

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

Diversification Opportunities for Dream Finders and Bill

-0.55

Correlation Coefficient

Dream Finders  Bill

Excellent diversification

The 3 months correlation between Dream and Bill is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Dream Finders Homes and Bill Com Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bill Com Holdings and Dream Finders 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 Dream Finders Homes are associated (or correlated) with Bill. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bill Com Holdings has no effect on the direction of Dream Finders i.e., Dream Finders and Bill go up and down completely randomly.

Pair Corralation between Dream Finders and Bill

Considering the 90-day investment horizon Dream Finders Homes is expected to under-perform the Bill. But the stock apears to be less risky and, when comparing its historical volatility, Dream Finders Homes is 1.05 times less risky than Bill. The stock trades about -0.52 of its potential returns per unit of risk. The Bill Com Holdings is currently generating about -0.17 of returns per unit of risk over similar time horizon. If you would invest  9,741  in Bill Com Holdings on October 7, 2024 and sell it today you would lose (917.00) from holding Bill Com Holdings or give up 9.41% of portfolio value over 90 days.

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

Dream Finders Homes  vs.  Bill Com Holdings

Dream Finders Homes

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Dream Finders Homes has generated negative risk-adjusted returns adding no value to investors with long positions. Despite inconsistent performance in the last few months, the Stock's technical and fundamental indicators remain fairly strong which may send shares a bit higher in February 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Bill Com Holdings

Risk-Adjusted Performance

19 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Bill Com Holdings are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. Despite quite fragile essential indicators, Bill disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Dream Finders and Bill

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

The idea behind Dream Finders Homes and Bill Com Holdings 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.