Correlation Between American Homes and Value
Can any of the company-specific risk be diversified away by investing in both American Homes and Value 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 Value 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 Value And Income, you can compare the effects of market volatilities on American Homes and Value 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 Value. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Homes and Value.
Diversification Opportunities for American Homes and Value
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between American and Value is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding American Homes 4 and Value And Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Value And Income 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 Value. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Value And Income has no effect on the direction of American Homes i.e., American Homes and Value go up and down completely randomly.
Pair Corralation between American Homes and Value
If you would invest 3,414 in American Homes 4 on September 4, 2024 and sell it today you would earn a total of 347.00 from holding American Homes 4 or generate 10.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.42% |
| Values | Daily Returns |
American Homes 4 vs. Value And Income
Performance |
| Timeline |
| American Homes 4 |
| Value And Income |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
American Homes and Value Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Homes and Value
The main advantage of trading using opposite American Homes and Value positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Homes position performs unexpectedly, Value 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 Value will offset losses from the drop in Value's long position.| American Homes vs. One Media iP | American Homes vs. Live Nation Entertainment | American Homes vs. Check Point Software | American Homes vs. Flutter Entertainment PLC |
| Value vs. Endeavour Mining Corp | Value vs. McEwen Mining | Value vs. Take Two Interactive Software | Value vs. Bisichi 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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