Correlation Between Dream Finders and CTS
Can any of the company-specific risk be diversified away by investing in both Dream Finders and CTS 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 Dream Finders and CTS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dream Finders Homes and CTS Corporation, you can compare the effects of market volatilities on Dream Finders and CTS 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 Dream Finders with a short position of CTS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dream Finders and CTS.
Diversification Opportunities for Dream Finders and CTS
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between Dream and CTS is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Dream Finders Homes and CTS Corp. in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CTS Corporation and Dream Finders 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 Dream Finders Homes are associated (or correlated) with CTS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CTS Corporation has no effect on the direction of Dream Finders i.e., Dream Finders and CTS go up and down completely randomly.
Pair Corralation between Dream Finders and CTS
Considering the 90-day investment horizon Dream Finders Homes is expected to generate 2.19 times more return on investment than CTS. However, Dream Finders is 2.19 times more volatile than CTS Corporation. It trades about 0.15 of its potential returns per unit of risk. CTS Corporation is currently generating about 0.06 per unit of risk. If you would invest 2,159 in Dream Finders Homes on May 27, 2025 and sell it today you would earn a total of 807.00 from holding Dream Finders Homes or generate 37.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dream Finders Homes vs. CTS Corp.
Performance |
| Timeline |
| Dream Finders Homes |
| CTS Corporation |
Dream Finders and CTS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dream Finders and CTS
The main advantage of trading using opposite Dream Finders and CTS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dream Finders position performs unexpectedly, CTS 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 CTS will offset losses from the drop in CTS's long position.| Dream Finders vs. Beazer Homes USA | Dream Finders vs. Century Communities | Dream Finders vs. Green Brick Partners | Dream Finders vs. Legacy Housing Corp |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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