Correlation Between LGI Homes and AirNet Technology
Can any of the company-specific risk be diversified away by investing in both LGI Homes and AirNet Technology 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 LGI Homes and AirNet Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LGI Homes and AirNet Technology, you can compare the effects of market volatilities on LGI Homes and AirNet Technology 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 AirNet Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of LGI Homes and AirNet Technology.
Diversification Opportunities for LGI Homes and AirNet Technology
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between LGI and AirNet is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding LGI Homes and AirNet Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AirNet Technology 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 AirNet Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AirNet Technology has no effect on the direction of LGI Homes i.e., LGI Homes and AirNet Technology go up and down completely randomly.
Pair Corralation between LGI Homes and AirNet Technology
If you would invest 11,087 in LGI Homes on December 30, 2023 and sell it today you would earn a total of 550.00 from holding LGI Homes or generate 4.96% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Flat |
Strength | Insignificant |
Accuracy | 0.0% |
Values | Daily Returns |
LGI Homes vs. AirNet Technology
Performance |
Timeline |
LGI Homes |
AirNet Technology |
Risk-Adjusted Performance
0 of 100
Low | High |
Very Weak
LGI Homes and AirNet Technology Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with LGI Homes and AirNet Technology
The main advantage of trading using opposite LGI Homes and AirNet Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LGI Homes position performs unexpectedly, AirNet Technology 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 AirNet Technology will offset losses from the drop in AirNet Technology's long position.LGI Homes vs. Westrock Coffee | LGI Homes vs. GEN Restaurant Group | LGI Homes vs. Biglari Holdings | LGI Homes vs. Juniata Valley Financial |
AirNet Technology vs. AssetMark Financial Holdings | AirNet Technology vs. Visionary Education Technology | AirNet Technology vs. Relx PLC ADR | AirNet Technology vs. Pearson PLC ADR |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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