Correlation Between Sare Holding and Lennar

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

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

Diversification Opportunities for Sare Holding and Lennar

0.0

Correlation Coefficient

Sare Holding  Lennar

Pay attention - limited upside

The 3 months correlation between Sare and Lennar is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Sare Holding SAB and Lennar in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lennar and Sare Holding 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 Sare Holding SAB are associated (or correlated) with Lennar. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lennar has no effect on the direction of Sare Holding i.e., Sare Holding and Lennar go up and down completely randomly.

Pair Corralation between Sare Holding and Lennar

If you would invest  0.90  in Sare Holding SAB on September 13, 2024 and sell it today you would earn a total of  0.00  from holding Sare Holding SAB or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Sare Holding SAB  vs.  Lennar

Sare Holding SAB

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Sare Holding SAB has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy primary indicators, Sare Holding is not utilizing all of its potentials. The newest stock price disarray, may contribute to short-term losses for the investors.

Lennar

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Lennar has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Sare Holding and Lennar

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

The idea behind Sare Holding SAB and Lennar 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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.