Correlation Between GGE Old and Landsea Homes

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

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

Diversification Opportunities for GGE Old and Landsea Homes

0.0

Correlation Coefficient

GGE Old  Landsea Homes

Pay attention - limited upside

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

Pair Corralation between GGE Old and Landsea Homes

If you would invest (100.00) in GGE Old on December 18, 2024 and sell it today you would earn a total of  100.00  from holding GGE Old or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

GGE Old  vs.  Landsea Homes Corp

GGE Old

Risk-Adjusted Performance

Very Weak

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

Landsea Homes Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days Landsea Homes Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's technical and fundamental indicators remain somewhat strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with GGE Old and Landsea Homes

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

The idea behind GGE Old and Landsea Homes 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.

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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.