Correlation Between MI Homes and Hurco Companies

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both MI Homes and Hurco Companies 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 MI Homes and Hurco Companies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MI Homes and Hurco Companies, you can compare the effects of market volatilities on MI Homes and Hurco Companies 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 MI Homes with a short position of Hurco Companies. Check out your portfolio center. Please also check ongoing floating volatility patterns of MI Homes and Hurco Companies.

Diversification Opportunities for MI Homes and Hurco Companies

0.71
  Correlation Coefficient

Poor diversification

The 3 months correlation between MHO and Hurco is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding MI Homes and Hurco Companies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hurco Companies and MI 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 MI Homes are associated (or correlated) with Hurco Companies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hurco Companies has no effect on the direction of MI Homes i.e., MI Homes and Hurco Companies go up and down completely randomly.

Pair Corralation between MI Homes and Hurco Companies

Considering the 90-day investment horizon MI Homes is expected to under-perform the Hurco Companies. In addition to that, MI Homes is 1.02 times more volatile than Hurco Companies. It trades about -0.62 of its total potential returns per unit of risk. Hurco Companies is currently generating about -0.06 per unit of volatility. If you would invest  1,910  in Hurco Companies on October 15, 2024 and sell it today you would lose (45.00) from holding Hurco Companies or give up 2.36% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy100.0%
ValuesDaily Returns

MI Homes  vs.  Hurco Companies

 Performance 
       Timeline  
MI Homes 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days MI 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 technical indicators remain very healthy which may send shares a bit higher in February 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.
Hurco Companies 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Hurco Companies has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady performance, the Stock's basic indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

MI Homes and Hurco Companies Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with MI Homes and Hurco Companies

The main advantage of trading using opposite MI Homes and Hurco Companies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MI Homes position performs unexpectedly, Hurco Companies 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 Hurco Companies will offset losses from the drop in Hurco Companies' long position.
The idea behind MI Homes and Hurco Companies 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.

Other Complementary Tools

Equity Analysis
Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities
Alpha Finder
Use alpha and beta coefficients to find investment opportunities after accounting for the risk
Bond Analysis
Evaluate and analyze corporate bonds as a potential investment for your portfolios.
Financial Widgets
Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets
Economic Indicators
Top statistical indicators that provide insights into how an economy is performing