Correlation Between Home Point and Greystone Housing

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

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

Diversification Opportunities for Home Point and Greystone Housing

-0.39

Correlation Coefficient

Home Point  Greystone Housing

Very good diversification

The 3 months correlation between Home and Greystone is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Home Point Capital and Greystone Housing Impact in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Greystone Housing Impact and Home Point 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 Home Point Capital are associated (or correlated) with Greystone Housing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Greystone Housing Impact has no effect on the direction of Home Point i.e., Home Point and Greystone Housing go up and down completely randomly.

Pair Corralation between Home Point and Greystone Housing

If you would invest  231.00  in Home Point Capital on September 3, 2024 and sell it today you would earn a total of  0.00  from holding Home Point Capital or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	1.56%
Values	Daily Returns

Home Point Capital  vs.  Greystone Housing Impact

Home Point Capital

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Home Point Capital has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Home Point is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private investors.

Greystone Housing Impact

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Greystone Housing Impact has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's technical indicators remain strong and the recent confusion on Wall Street may also be a sign of long-lasting gains for the firm traders.

Pair Trading with Home Point and Greystone Housing

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

The idea behind Home Point Capital and Greystone Housing Impact 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.