Correlation Between Redfin Corp and Maui Land

Can any of the company-specific risk be diversified away by investing in both Redfin Corp and Maui Land 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 Redfin Corp and Maui Land into the same portfolio, which is an essential part of the fundamental portfolio management process.

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

Diversification Opportunities for Redfin Corp and Maui Land

-0.5

Correlation Coefficient

Redfin Corp  Maui Land

Very good diversification

The 3 months correlation between Redfin and Maui is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Redfin Corp and Maui Land Pineapple in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Maui Land Pineapple and Redfin Corp 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 Redfin Corp are associated (or correlated) with Maui Land. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Maui Land Pineapple has no effect on the direction of Redfin Corp i.e., Redfin Corp and Maui Land go up and down completely randomly.

Pair Corralation between Redfin Corp and Maui Land

Given the investment horizon of 90 days Redfin Corp is expected to generate 4.36 times more return on investment than Maui Land. However, Redfin Corp is 4.36 times more volatile than Maui Land Pineapple. It trades about 0.08 of its potential returns per unit of risk. Maui Land Pineapple is currently generating about -0.09 per unit of risk. If you would invest  794.00  in Redfin Corp on December 28, 2024 and sell it today you would earn a total of  228.00  from holding Redfin Corp or generate 28.72% return on investment over 90 days.

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

Redfin Corp  vs.  Maui Land Pineapple

Redfin Corp

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Redfin Corp are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of very unsteady technical and fundamental indicators, Redfin Corp displayed solid returns over the last few months and may actually be approaching a breakup point.

Maui Land Pineapple

Risk-Adjusted Performance

Very Weak

Over the last 90 days Maui Land Pineapple has generated negative risk-adjusted returns adding no value to investors with long positions. Even with unfluctuating performance in the last few months, the Stock's essential indicators remain relatively invariable which may send shares a bit higher in April 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pair Trading with Redfin Corp and Maui Land

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

The idea behind Redfin Corp and Maui Land Pineapple 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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.