Correlation Between Zillow Group and Sun Communities

Can any of the company-specific risk be diversified away by investing in both Zillow Group and Sun Communities 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 Zillow Group and Sun Communities into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Zillow Group Class and Sun Communities, you can compare the effects of market volatilities on Zillow Group and Sun Communities 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 Zillow Group with a short position of Sun Communities. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zillow Group and Sun Communities.

Diversification Opportunities for Zillow Group and Sun Communities

0.18

Correlation Coefficient

Zillow Group  Sun Communities

Average diversification

The 3 months correlation between Zillow and Sun is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Zillow Group Class and Sun Communities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sun Communities and Zillow Group 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 Zillow Group Class are associated (or correlated) with Sun Communities. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sun Communities has no effect on the direction of Zillow Group i.e., Zillow Group and Sun Communities go up and down completely randomly.

Pair Corralation between Zillow Group and Sun Communities

If you would invest  6,813  in Zillow Group Class on May 4, 2025 and sell it today you would earn a total of  1,207  from holding Zillow Group Class or generate 17.72% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	98.41%
Values	Daily Returns

Zillow Group Class  vs.  Sun Communities

Zillow Group Class

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Zillow Group Class are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of fairly inconsistent basic indicators, Zillow Group showed solid returns over the last few months and may actually be approaching a breakup point.

Sun Communities

Risk-Adjusted Performance

Very Weak

Over the last 90 days Sun Communities has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong basic indicators, Sun Communities is not utilizing all of its potentials. The latest stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Zillow Group and Sun Communities

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

The idea behind Zillow Group Class and Sun Communities 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.

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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..