Correlation Between United Homes and CleanGo Innovations

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

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

Diversification Opportunities for United Homes and CleanGo Innovations

-0.78

Correlation Coefficient

United Homes  CleanGo Innovations

Pay attention - limited upside

The 3 months correlation between United and CleanGo is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding United Homes Group and CleanGo Innovations in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CleanGo Innovations and United 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 United Homes Group are associated (or correlated) with CleanGo Innovations. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CleanGo Innovations has no effect on the direction of United Homes i.e., United Homes and CleanGo Innovations go up and down completely randomly.

Pair Corralation between United Homes and CleanGo Innovations

Considering the 90-day investment horizon United Homes Group is expected to generate 0.9 times more return on investment than CleanGo Innovations. However, United Homes Group is 1.11 times less risky than CleanGo Innovations. It trades about -0.06 of its potential returns per unit of risk. CleanGo Innovations is currently generating about -0.08 per unit of risk. If you would invest  613.00  in United Homes Group on October 8, 2024 and sell it today you would lose (205.00) from holding United Homes Group or give up 33.44% of portfolio value over 90 days.

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

United Homes Group  vs.  CleanGo Innovations

United Homes Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days United Homes Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unfluctuating performance in the last few months, the Stock's technical indicators remain nearly stable which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

CleanGo Innovations

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in CleanGo Innovations are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak basic indicators, CleanGo Innovations reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with United Homes and CleanGo Innovations

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

The idea behind United Homes Group and CleanGo Innovations 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..