Correlation Between United Homes and Bill

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

Diversification Opportunities for United Homes and Bill

0.1

Correlation Coefficient

United Homes  Bill

Average diversification

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

Pair Corralation between United Homes and Bill

Considering the 90-day investment horizon United Homes Group is expected to under-perform the Bill. In addition to that, United Homes is 1.34 times more volatile than Bill Com Holdings. It trades about -0.03 of its total potential returns per unit of risk. Bill Com Holdings is currently generating about 0.02 per unit of volatility. 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

United Homes Group  vs.  Bill Com Holdings

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.

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.

Pair Trading with United Homes and Bill

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

The idea behind United Homes Group and Bill Com Holdings 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.