Correlation Between American Homes and KENEDIX OFFICE
Can any of the company-specific risk be diversified away by investing in both American Homes and KENEDIX OFFICE 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 KENEDIX OFFICE 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 KENEDIX OFFICE INV, you can compare the effects of market volatilities on American Homes and KENEDIX OFFICE 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 KENEDIX OFFICE. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Homes and KENEDIX OFFICE.
Diversification Opportunities for American Homes and KENEDIX OFFICE
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between American and KENEDIX is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding American Homes 4 and KENEDIX OFFICE INV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KENEDIX OFFICE INV 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 KENEDIX OFFICE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KENEDIX OFFICE INV has no effect on the direction of American Homes i.e., American Homes and KENEDIX OFFICE go up and down completely randomly.
Pair Corralation between American Homes and KENEDIX OFFICE
Assuming the 90 days trading horizon American Homes 4 is expected to under-perform the KENEDIX OFFICE. But the stock apears to be less risky and, when comparing its historical volatility, American Homes 4 is 1.2 times less risky than KENEDIX OFFICE. The stock trades about -0.15 of its potential returns per unit of risk. The KENEDIX OFFICE INV is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 88,500 in KENEDIX OFFICE INV on October 25, 2024 and sell it today you would lose (500.00) from holding KENEDIX OFFICE INV or give up 0.56% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
American Homes 4 vs. KENEDIX OFFICE INV
Performance |
| Timeline |
| American Homes 4 |
| KENEDIX OFFICE INV |
American Homes and KENEDIX OFFICE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Homes and KENEDIX OFFICE
The main advantage of trading using opposite American Homes and KENEDIX OFFICE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Homes position performs unexpectedly, KENEDIX OFFICE 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 KENEDIX OFFICE will offset losses from the drop in KENEDIX OFFICE's long position.| American Homes vs. Delta Air Lines | American Homes vs. Ryanair Holdings plc | American Homes vs. Fair Isaac Corp | American Homes vs. BOS BETTER ONLINE |
| KENEDIX OFFICE vs. 24SEVENOFFICE GROUP AB | KENEDIX OFFICE vs. OFFICE DEPOT | KENEDIX OFFICE vs. AGRICULTBK HADR25 YC | KENEDIX OFFICE vs. Sumitomo Mitsui Construction |
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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
Other Complementary Tools
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. |