Correlation Between Suntrust Home and Megawide Construction

Can any of the company-specific risk be diversified away by investing in both Suntrust Home and Megawide Construction 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 Suntrust Home and Megawide Construction into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Suntrust Home Developers and Megawide Construction Corp, you can compare the effects of market volatilities on Suntrust Home and Megawide Construction 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 Suntrust Home with a short position of Megawide Construction. Check out your portfolio center. Please also check ongoing floating volatility patterns of Suntrust Home and Megawide Construction.

Diversification Opportunities for Suntrust Home and Megawide Construction

0.19

Correlation Coefficient

Suntrust Home  Megawide Construction

Average diversification

The 3 months correlation between Suntrust and Megawide is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Suntrust Home Developers and Megawide Construction Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Megawide Construction and Suntrust Home 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 Suntrust Home Developers are associated (or correlated) with Megawide Construction. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Megawide Construction has no effect on the direction of Suntrust Home i.e., Suntrust Home and Megawide Construction go up and down completely randomly.

Pair Corralation between Suntrust Home and Megawide Construction

Assuming the 90 days trading horizon Suntrust Home Developers is expected to under-perform the Megawide Construction. In addition to that, Suntrust Home is 3.58 times more volatile than Megawide Construction Corp. It trades about -0.04 of its total potential returns per unit of risk. Megawide Construction Corp is currently generating about -0.02 per unit of volatility. If you would invest  10,097  in Megawide Construction Corp on May 5, 2025 and sell it today you would lose (97.00) from holding Megawide Construction Corp or give up 0.96% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	75.86%
Values	Daily Returns

Suntrust Home Developers  vs.  Megawide Construction Corp

Suntrust Home Developers

Risk-Adjusted Performance

Very Weak

Over the last 90 days Suntrust Home Developers has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady performance, the Stock's technical and fundamental indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Megawide Construction

Risk-Adjusted Performance

Very Weak

Over the last 90 days Megawide Construction Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Megawide Construction is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Suntrust Home and Megawide Construction

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

The idea behind Suntrust Home Developers and Megawide Construction Corp 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.

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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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..