Correlation Between City Developments and Green Brick
Can any of the company-specific risk be diversified away by investing in both City Developments and Green Brick 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 City Developments and Green Brick into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between City Developments Limited and Green Brick Partners, you can compare the effects of market volatilities on City Developments and Green Brick 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 City Developments with a short position of Green Brick. Check out your portfolio center. Please also check ongoing floating volatility patterns of City Developments and Green Brick.
Diversification Opportunities for City Developments and Green Brick
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between City and Green is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding City Developments Limited and Green Brick Partners in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Green Brick Partners and City Developments 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 City Developments Limited are associated (or correlated) with Green Brick. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Green Brick Partners has no effect on the direction of City Developments i.e., City Developments and Green Brick go up and down completely randomly.
Pair Corralation between City Developments and Green Brick
Assuming the 90 days horizon City Developments Limited is expected to generate 0.11 times more return on investment than Green Brick. However, City Developments Limited is 8.83 times less risky than Green Brick. It trades about 0.22 of its potential returns per unit of risk. Green Brick Partners is currently generating about -0.21 per unit of risk. If you would invest 438.00 in City Developments Limited on January 30, 2024 and sell it today you would earn a total of 4.00 from holding City Developments Limited or generate 0.91% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
City Developments Limited vs. Green Brick Partners
Performance |
Timeline |
City Developments |
Green Brick Partners |
City Developments and Green Brick Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with City Developments and Green Brick
The main advantage of trading using opposite City Developments and Green Brick positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if City Developments position performs unexpectedly, Green Brick 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 Green Brick will offset losses from the drop in Green Brick's long position.City Developments vs. Holiday Island Holdings | City Developments vs. The Allstate | City Developments vs. CRA International | City Developments vs. Aurora Cannabis |
Green Brick vs. Taylor Morn Home | Green Brick vs. Century Communities | Green Brick vs. Beazer Homes USA | Green Brick vs. Meritage |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges |