Correlation Between UWM Holdings and Security National

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

By analyzing existing cross correlation between UWM Holdings Corp and Security National Financial, you can compare the effects of market volatilities on UWM Holdings and Security National 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 UWM Holdings with a short position of Security National. Check out your portfolio center. Please also check ongoing floating volatility patterns of UWM Holdings and Security National.

Diversification Opportunities for UWM Holdings and Security National

-0.77

Correlation Coefficient

UWM Holdings  Security National

Pay attention - limited upside

The 3 months correlation between UWM and Security is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding UWM Holdings Corp and Security National Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Security National and UWM Holdings 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 UWM Holdings Corp are associated (or correlated) with Security National. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Security National has no effect on the direction of UWM Holdings i.e., UWM Holdings and Security National go up and down completely randomly.

Pair Corralation between UWM Holdings and Security National

Given the investment horizon of 90 days UWM Holdings Corp is expected to under-perform the Security National. In addition to that, UWM Holdings is 1.13 times more volatile than Security National Financial. It trades about -0.22 of its total potential returns per unit of risk. Security National Financial is currently generating about 0.35 per unit of volatility. If you would invest  855.00  in Security National Financial on August 31, 2024 and sell it today you would earn a total of  451.00  from holding Security National Financial or generate 52.75% return on investment over 90 days.

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

UWM Holdings Corp  vs.  Security National Financial

UWM Holdings Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days UWM Holdings Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of inconsistent performance in the last few months, the Stock's primary indicators remain rather sound which may send shares a bit higher in December 2024. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Security National

Risk-Adjusted Performance

27 of 100

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Security National Financial are ranked lower than 27 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unsteady fundamental indicators, Security National sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with UWM Holdings and Security National

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

The idea behind UWM Holdings Corp and Security National Financial 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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.