Correlation Between United Homes and Femasys

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

Diversification Opportunities for United Homes and Femasys

-0.17

Correlation Coefficient

United Homes  Femasys

Good diversification

The 3 months correlation between United and Femasys is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding United Homes Group and Femasys in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Femasys 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 Femasys. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Femasys has no effect on the direction of United Homes i.e., United Homes and Femasys go up and down completely randomly.

Pair Corralation between United Homes and Femasys

Considering the 90-day investment horizon United Homes Group is expected to generate 1.44 times more return on investment than Femasys. However, United Homes is 1.44 times more volatile than Femasys. It trades about -0.11 of its potential returns per unit of risk. Femasys is currently generating about -0.25 per unit of risk. If you would invest  420.00  in United Homes Group on October 11, 2024 and sell it today you would lose (35.00) from holding United Homes Group or give up 8.33% of portfolio value over 90 days.

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

United Homes Group  vs.  Femasys

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 unsteady 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.

Femasys

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Femasys are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong primary indicators, Femasys is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with United Homes and Femasys

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

The idea behind United Homes Group and Femasys 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.