Correlation Between Greystone Housing and UWM Holdings

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

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

Diversification Opportunities for Greystone Housing and UWM Holdings

0.51

Correlation Coefficient

Greystone Housing  UWM Holdings

Very weak diversification

The 3 months correlation between Greystone and UWM is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Greystone Housing Impact 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 Greystone Housing 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 Greystone Housing Impact 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 Greystone Housing i.e., Greystone Housing and UWM Holdings go up and down completely randomly.

Pair Corralation between Greystone Housing and UWM Holdings

Considering the 90-day investment horizon Greystone Housing Impact is expected to generate 0.76 times more return on investment than UWM Holdings. However, Greystone Housing Impact is 1.32 times less risky than UWM Holdings. It trades about 0.18 of its potential returns per unit of risk. UWM Holdings Corp is currently generating about 0.01 per unit of risk. If you would invest  1,037  in Greystone Housing Impact on December 28, 2024 and sell it today you would earn a total of  239.00  from holding Greystone Housing Impact or generate 23.05% return on investment over 90 days.

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

Greystone Housing Impact  vs.  UWM Holdings Corp

Greystone Housing Impact

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Greystone Housing Impact are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite fairly unsteady technical indicators, Greystone Housing demonstrated solid returns over the last few months and may actually be approaching a breakup point.

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 Greystone Housing and UWM Holdings

The main advantage of trading using opposite Greystone Housing and UWM Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Greystone Housing 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 Greystone Housing Impact 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.