Correlation Between Bill and United Homes

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

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

Diversification Opportunities for Bill and United Homes

0.1

Correlation Coefficient

Bill  United Homes

Average diversification

The 3 months correlation between Bill and United is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Bill Com Holdings and United Homes Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on United Homes Group and Bill 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 Bill Com Holdings are associated (or correlated) with United Homes. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of United Homes Group has no effect on the direction of Bill i.e., Bill and United Homes go up and down completely randomly.

Pair Corralation between Bill and United Homes

Given the investment horizon of 90 days Bill Com Holdings is expected to generate 0.74 times more return on investment than United Homes. However, Bill Com Holdings is 1.34 times less risky than United Homes. It trades about 0.02 of its potential returns per unit of risk. United Homes Group is currently generating about -0.03 per unit of risk. If you would invest  8,356  in Bill Com Holdings on September 14, 2024 and sell it today you would earn a total of  492.50  from holding Bill Com Holdings or generate 5.89% return on investment over 90 days.

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

Bill Com Holdings  vs.  United Homes Group

Bill Com Holdings

Risk-Adjusted Performance

21 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Bill Com Holdings are ranked lower than 21 (%) of all global equities and portfolios over the last 90 days. Despite quite fragile essential indicators, Bill disclosed solid returns over the last few months and may actually be approaching a breakup point.

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 weak performance in the last few months, the Stock's technical indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Bill and United Homes

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

The idea behind Bill Com Holdings and United Homes Group 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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.