Correlation Between WIMFARM SA and American Homes
Can any of the company-specific risk be diversified away by investing in both WIMFARM SA and American Homes 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 WIMFARM SA and American Homes into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between WIMFARM SA EO and American Homes 4, you can compare the effects of market volatilities on WIMFARM SA and American Homes 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 WIMFARM SA with a short position of American Homes. Check out your portfolio center. Please also check ongoing floating volatility patterns of WIMFARM SA and American Homes.
Diversification Opportunities for WIMFARM SA and American Homes
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between WIMFARM and American is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding WIMFARM SA EO and American Homes 4 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Homes 4 and WIMFARM SA 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 WIMFARM SA EO are associated (or correlated) with American Homes. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Homes 4 has no effect on the direction of WIMFARM SA i.e., WIMFARM SA and American Homes go up and down completely randomly.
Pair Corralation between WIMFARM SA and American Homes
Assuming the 90 days horizon WIMFARM SA EO is expected to under-perform the American Homes. In addition to that, WIMFARM SA is 2.27 times more volatile than American Homes 4. It trades about -0.06 of its total potential returns per unit of risk. American Homes 4 is currently generating about 0.02 per unit of volatility. If you would invest 3,064 in American Homes 4 on November 8, 2024 and sell it today you would earn a total of 316.00 from holding American Homes 4 or generate 10.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
WIMFARM SA EO vs. American Homes 4
Performance |
| Timeline |
| WIMFARM SA EO |
| American Homes 4 |
WIMFARM SA and American Homes Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WIMFARM SA and American Homes
The main advantage of trading using opposite WIMFARM SA and American Homes positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WIMFARM SA position performs unexpectedly, American Homes 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 American Homes will offset losses from the drop in American Homes' long position.| WIMFARM SA vs. Chiba Bank | WIMFARM SA vs. East Africa Metals | WIMFARM SA vs. Eidesvik Offshore ASA | WIMFARM SA vs. Erste Group Bank |
| American Homes vs. The Trade Desk | American Homes vs. CANON MARKETING JP | American Homes vs. Richardson Electronics | American Homes vs. Tradeweb Markets |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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