Correlation Between Sare Holding and PulteGroup

Can any of the company-specific risk be diversified away by investing in both Sare Holding and PulteGroup 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 PulteGroup 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 PulteGroup, you can compare the effects of market volatilities on Sare Holding and PulteGroup 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 PulteGroup. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sare Holding and PulteGroup.

Diversification Opportunities for Sare Holding and PulteGroup

0.0

Correlation Coefficient

Sare Holding  PulteGroup

Pay attention - limited upside

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

Pair Corralation between Sare Holding and PulteGroup

If you would invest  198,043  in PulteGroup on September 24, 2024 and sell it today you would earn a total of  21,957  from holding PulteGroup or generate 11.09% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	99.2%
Values	Daily Returns

Sare Holding SAB  vs.  PulteGroup

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 current stock price disarray, may contribute to short-term losses for the investors.

PulteGroup

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days PulteGroup 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 primary indicators remain fairly strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Sare Holding and PulteGroup

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

The idea behind Sare Holding SAB and PulteGroup 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.