Correlation Between Getty Images and United Homes

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

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

Diversification Opportunities for Getty Images and United Homes

0.6

Correlation Coefficient

Getty Images  United Homes

Poor diversification

The 3 months correlation between Getty and United is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Getty Images Holdings 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 Getty Images 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 Getty Images Holdings 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 Getty Images i.e., Getty Images and United Homes go up and down completely randomly.

Pair Corralation between Getty Images and United Homes

Given the investment horizon of 90 days Getty Images Holdings is expected to generate 1.01 times more return on investment than United Homes. However, Getty Images is 1.01 times more volatile than United Homes Group. It trades about -0.02 of its potential returns per unit of risk. United Homes Group is currently generating about -0.04 per unit of risk. If you would invest  511.00  in Getty Images Holdings on October 12, 2024 and sell it today you would lose (248.00) from holding Getty Images Holdings or give up 48.53% of portfolio value over 90 days.

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

Getty Images Holdings  vs.  United Homes Group

Getty Images Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Getty Images Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

United Homes Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days United Homes Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unfluctuating performance in the last few months, the Stock's technical indicators remain nearly stable which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Getty Images and United Homes

The main advantage of trading using opposite Getty Images and United Homes positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Getty Images 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.

The idea behind Getty Images Holdings and United Homes Group 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.