Correlation Between Guild Holdings and Home Point

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

By analyzing existing cross correlation between Guild Holdings Co and Home Point Capital, you can compare the effects of market volatilities on Guild Holdings and Home Point 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 Guild Holdings with a short position of Home Point. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guild Holdings and Home Point.

Diversification Opportunities for Guild Holdings and Home Point

-0.54

Correlation Coefficient

Guild Holdings  Home Point

Excellent diversification

The 3 months correlation between Guild and Home is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Guild Holdings Co and Home Point Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Home Point Capital and Guild 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 Guild Holdings Co are associated (or correlated) with Home Point. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Home Point Capital has no effect on the direction of Guild Holdings i.e., Guild Holdings and Home Point go up and down completely randomly.

Pair Corralation between Guild Holdings and Home Point

If you would invest  231.00  in Home Point Capital on August 31, 2024 and sell it today you would earn a total of  0.00  from holding Home Point Capital or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	1.59%
Values	Daily Returns

Guild Holdings Co  vs.  Home Point Capital

Guild Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Guild Holdings Co has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fragile performance in the last few months, the Stock's essential 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.

Home Point Capital

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Home Point Capital has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Home Point is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Guild Holdings and Home Point

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

The idea behind Guild Holdings Co and Home Point Capital 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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.