Correlation Analysis Between Lennar and Meritage Homes

This module allows you to analyze existing cross correlation between Lennar Corporation and Meritage Homes Corporation. You can compare the effects of market volatilities on Lennar and Meritage 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 Lennar with a short position of Meritage Homes. See also your portfolio center. Please also check ongoing floating volatility patterns of Lennar and Meritage Homes.
Horizon     30 Days    Login   to change
Symbolsvs
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Comparative Performance

Lennar  
33

Risk-Adjusted Performance

Compared to the overall equity markets, risk-adjusted returns on investments in Lennar Corporation are ranked lower than 3 (%) of all global equities and portfolios over the last 30 days. Allthough quite persistent forward indicators, Lennar is not utilizing all of its potentials. The prevalent stock price mess, may contribute to short term losses for the partners.
Meritage Homes  
1313

Risk-Adjusted Performance

Compared to the overall equity markets, risk-adjusted returns on investments in Meritage Homes Corporation are ranked lower than 13 (%) of all global equities and portfolios over the last 30 days. Despite nearly fragile fundamental indicators, Meritage Homes layed out solid returns over the last few months and may actually be approaching a breakup point.

Lennar and Meritage Homes Volatility Contrast

 Predicted Return Density 
      Returns 

Lennar Corp.  vs.  Meritage Homes Corp.

 Performance (%) 
      Timeline 

Pair Volatility

Considering 30-days investment horizon, Lennar is expected to generate 7.24 times less return on investment than Meritage Homes. But when comparing it to its historical volatility, Lennar Corporation is 1.71 times less risky than Meritage Homes. It trades about 0.05 of its potential returns per unit of risk. Meritage Homes Corporation is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest  5,078  in Meritage Homes Corporation on August 20, 2019 and sell it today you would earn a total of  1,975  from holding Meritage Homes Corporation or generate 38.89% return on investment over 30 days.

Pair Corralation between Lennar and Meritage Homes

0.58
Time Period3 Months [change]
DirectionPositive 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

Diversification Opportunities for Lennar and Meritage Homes

Lennar Corp. diversification synergy

Very weak diversification

Overlapping area represents the amount of risk that can be diversified away by holding Lennar Corp. and Meritage Homes Corp. in the same portfolio assuming nothing else is changed. The correlation between historical prices or returns on Meritage Homes and Lennar 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 Lennar Corporation are associated (or correlated) with Meritage Homes. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Meritage Homes has no effect on the direction of Lennar i.e. Lennar and Meritage Homes go up and down completely randomly.
See also your portfolio center. Please also try Aroon Oscillator module to analyze current equity momentum using aroon oscillator and other momentum ratios.


 
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