Correlation Between Home Point and UWM Holdings

Can any of the company-specific risk be diversified away by investing in both Home Point 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 Home Point and UWM Holdings 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 UWM Holdings Corp, you can compare the effects of market volatilities on Home Point 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 Home Point with a short position of UWM Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Home Point and UWM Holdings.

Diversification Opportunities for Home Point and UWM Holdings

0.0

Correlation Coefficient

Home Point  UWM Holdings

Pay attention - limited upside

The 3 months correlation between Home and UWM is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Home Point Capital 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 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 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 Home Point i.e., Home Point and UWM Holdings go up and down completely randomly.

Pair Corralation between Home Point and UWM Holdings

If you would invest  574.00  in UWM Holdings Corp on December 26, 2024 and sell it today you would lose (7.00) from holding UWM Holdings Corp or give up 1.22% of portfolio value over 90 days.

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

Home Point Capital  vs.  UWM Holdings Corp

Home Point Capital

Risk-Adjusted Performance

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.

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 Home Point and UWM Holdings

The main advantage of trading using opposite Home Point and UWM Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Home Point 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 Home Point Capital 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.