Correlation Between Landsea Homes and Nuvve Holding

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

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

Diversification Opportunities for Landsea Homes and Nuvve Holding

0.74

Correlation Coefficient

Landsea Homes  Nuvve Holding

Poor diversification

The 3 months correlation between Landsea and Nuvve is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Landsea Homes and Nuvve Holding Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nuvve Holding Corp and Landsea Homes 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 Landsea Homes are associated (or correlated) with Nuvve Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nuvve Holding Corp has no effect on the direction of Landsea Homes i.e., Landsea Homes and Nuvve Holding go up and down completely randomly.

Pair Corralation between Landsea Homes and Nuvve Holding

Assuming the 90 days horizon Landsea Homes is expected to under-perform the Nuvve Holding. But the stock apears to be less risky and, when comparing its historical volatility, Landsea Homes is 2.05 times less risky than Nuvve Holding. The stock trades about -0.38 of its potential returns per unit of risk. The Nuvve Holding Corp is currently generating about -0.05 of returns per unit of risk over similar time horizon. If you would invest  2.39  in Nuvve Holding Corp on September 27, 2024 and sell it today you would lose (0.69) from holding Nuvve Holding Corp or give up 28.87% of portfolio value over 90 days.

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

Landsea Homes  vs.  Nuvve Holding Corp

Landsea Homes

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Landsea Homes has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of inconsistent performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in January 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Nuvve Holding Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Nuvve Holding Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's technical and fundamental indicators remain fairly stable which may send shares a bit higher in January 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Pair Trading with Landsea Homes and Nuvve Holding

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

The idea behind Landsea Homes and Nuvve Holding 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 CEOs Directory module to screen CEOs from public companies around the world.