Correlation Between INVITATION HOMES and ATRESMEDIA
Can any of the company-specific risk be diversified away by investing in both INVITATION HOMES and ATRESMEDIA 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 INVITATION HOMES and ATRESMEDIA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between INVITATION HOMES DL and ATRESMEDIA, you can compare the effects of market volatilities on INVITATION HOMES and ATRESMEDIA 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 INVITATION HOMES with a short position of ATRESMEDIA. Check out your portfolio center. Please also check ongoing floating volatility patterns of INVITATION HOMES and ATRESMEDIA.
Diversification Opportunities for INVITATION HOMES and ATRESMEDIA
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between INVITATION and ATRESMEDIA is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding INVITATION HOMES DL and ATRESMEDIA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ATRESMEDIA and INVITATION 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 INVITATION HOMES DL are associated (or correlated) with ATRESMEDIA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ATRESMEDIA has no effect on the direction of INVITATION HOMES i.e., INVITATION HOMES and ATRESMEDIA go up and down completely randomly.
Pair Corralation between INVITATION HOMES and ATRESMEDIA
Assuming the 90 days horizon INVITATION HOMES DL is expected to generate 1.97 times more return on investment than ATRESMEDIA. However, INVITATION HOMES is 1.97 times more volatile than ATRESMEDIA. It trades about 0.02 of its potential returns per unit of risk. ATRESMEDIA is currently generating about -0.08 per unit of risk. If you would invest 3,160 in INVITATION HOMES DL on August 25, 2024 and sell it today you would earn a total of 20.00 from holding INVITATION HOMES DL or generate 0.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
INVITATION HOMES DL vs. ATRESMEDIA
Performance |
| Timeline |
| INVITATION HOMES |
| ATRESMEDIA |
INVITATION HOMES and ATRESMEDIA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with INVITATION HOMES and ATRESMEDIA
The main advantage of trading using opposite INVITATION HOMES and ATRESMEDIA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if INVITATION HOMES position performs unexpectedly, ATRESMEDIA 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 ATRESMEDIA will offset losses from the drop in ATRESMEDIA's long position.| INVITATION HOMES vs. American Homes 4 | INVITATION HOMES vs. Superior Plus Corp | INVITATION HOMES vs. NMI Holdings | INVITATION HOMES vs. Origin Agritech |
| ATRESMEDIA vs. INVITATION HOMES DL | ATRESMEDIA vs. LGI Homes | ATRESMEDIA vs. WisdomTree Investments | ATRESMEDIA vs. Tri Pointe Homes |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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