Correlation Between American Homes and Bet At
Can any of the company-specific risk be diversified away by investing in both American Homes and Bet At 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 Bet At 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 bet at home AG, you can compare the effects of market volatilities on American Homes and Bet At 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 Bet At. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Homes and Bet At.
Diversification Opportunities for American Homes and Bet At
-0.74 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between American and Bet is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding American Homes 4 and bet at home AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on bet at home 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 Bet At. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of bet at home has no effect on the direction of American Homes i.e., American Homes and Bet At go up and down completely randomly.
Pair Corralation between American Homes and Bet At
Assuming the 90 days trading horizon American Homes is expected to generate 2.35 times less return on investment than Bet At. But when comparing it to its historical volatility, American Homes 4 is 3.4 times less risky than Bet At. It trades about 0.03 of its potential returns per unit of risk. bet at home AG is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 261.00 in bet at home AG on December 11, 2024 and sell it today you would earn a total of 9.00 from holding bet at home AG or generate 3.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 96.31% |
| Values | Daily Returns |
American Homes 4 vs. bet at home AG
Performance |
| Timeline |
| American Homes 4 |
| bet at home |
American Homes and Bet At Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Homes and Bet At
The main advantage of trading using opposite American Homes and Bet At positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Homes position performs unexpectedly, Bet At 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 Bet At will offset losses from the drop in Bet At's long position.| American Homes vs. Monster Beverage Corp | ||
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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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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