Correlation Between LGI Homes and PHILIP
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By analyzing existing cross correlation between LGI Homes and PHILIP MORRIS INTL, you can compare the effects of market volatilities on LGI Homes and PHILIP 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 LGI Homes with a short position of PHILIP. Check out your portfolio center. Please also check ongoing floating volatility patterns of LGI Homes and PHILIP.
Diversification Opportunities for LGI Homes and PHILIP
Very weak diversification
The 3 months correlation between LGI and PHILIP is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding LGI Homes and PHILIP MORRIS INTL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PHILIP MORRIS INTL and LGI 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 LGI Homes are associated (or correlated) with PHILIP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PHILIP MORRIS INTL has no effect on the direction of LGI Homes i.e., LGI Homes and PHILIP go up and down completely randomly.
Pair Corralation between LGI Homes and PHILIP
Given the investment horizon of 90 days LGI Homes is expected to under-perform the PHILIP. In addition to that, LGI Homes is 2.12 times more volatile than PHILIP MORRIS INTL. It trades about -0.15 of its total potential returns per unit of risk. PHILIP MORRIS INTL is currently generating about -0.21 per unit of volatility. If you would invest 9,931 in PHILIP MORRIS INTL on September 26, 2024 and sell it today you would lose (1,312) from holding PHILIP MORRIS INTL or give up 13.21% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
LGI Homes vs. PHILIP MORRIS INTL
Performance |
Timeline |
LGI Homes |
PHILIP MORRIS INTL |
LGI Homes and PHILIP Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with LGI Homes and PHILIP
The main advantage of trading using opposite LGI Homes and PHILIP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LGI Homes position performs unexpectedly, PHILIP 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 PHILIP will offset losses from the drop in PHILIP's long position.LGI Homes vs. TRI Pointe Homes | LGI Homes vs. Meritage | LGI Homes vs. Taylor Morn Home | LGI Homes vs. Hovnanian Enterprises |
PHILIP vs. Revolve Group LLC | PHILIP vs. Hooker Furniture | PHILIP vs. Smith Douglas Homes | PHILIP vs. LGI Homes |
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 Stocks Directory module to find actively traded stocks across global markets.
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