Correlation Between American Homes and Mobilezone Holding
Can any of the company-specific risk be diversified away by investing in both American Homes and Mobilezone Holding 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 American Homes and Mobilezone Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Homes 4 and mobilezone holding AG, you can compare the effects of market volatilities on American Homes and Mobilezone Holding 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 American Homes with a short position of Mobilezone Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Homes and Mobilezone Holding.
Diversification Opportunities for American Homes and Mobilezone Holding
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between American and Mobilezone is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding American Homes 4 and mobilezone holding AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on mobilezone holding and American 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 American Homes 4 are associated (or correlated) with Mobilezone Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of mobilezone holding has no effect on the direction of American Homes i.e., American Homes and Mobilezone Holding go up and down completely randomly.
Pair Corralation between American Homes and Mobilezone Holding
Assuming the 90 days trading horizon American Homes 4 is expected to generate 0.44 times more return on investment than Mobilezone Holding. However, American Homes 4 is 2.29 times less risky than Mobilezone Holding. It trades about -0.16 of its potential returns per unit of risk. mobilezone holding AG is currently generating about -0.29 per unit of risk. If you would invest 3,710 in American Homes 4 on October 14, 2024 and sell it today you would lose (130.00) from holding American Homes 4 or give up 3.5% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 94.74% |
| Values | Daily Returns |
American Homes 4 vs. mobilezone holding AG
Performance |
| Timeline |
| American Homes 4 |
| mobilezone holding |
American Homes and Mobilezone Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Homes and Mobilezone Holding
The main advantage of trading using opposite American Homes and Mobilezone Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Homes position performs unexpectedly, Mobilezone Holding 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 Mobilezone Holding will offset losses from the drop in Mobilezone Holding's long position.| American Homes vs. Gamma Communications PLC | American Homes vs. Cairo Communication SpA | American Homes vs. Jacquet Metal Service | American Homes vs. Coeur Mining |
| Mobilezone Holding vs. McEwen Mining | Mobilezone Holding vs. Fortune Brands Home | Mobilezone Holding vs. American Homes 4 | Mobilezone Holding vs. Hochschild Mining plc |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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