Correlation Between Amedeo Air and American Homes
Can any of the company-specific risk be diversified away by investing in both Amedeo Air 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 Amedeo Air and American Homes into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Amedeo Air Four and American Homes 4, you can compare the effects of market volatilities on Amedeo Air 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 Amedeo Air with a short position of American Homes. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amedeo Air and American Homes.
Diversification Opportunities for Amedeo Air and American Homes
-0.83 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Amedeo and American is -0.83. Overlapping area represents the amount of risk that can be diversified away by holding Amedeo Air Four 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 Amedeo Air 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 Amedeo Air Four 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 Amedeo Air i.e., Amedeo Air and American Homes go up and down completely randomly.
Pair Corralation between Amedeo Air and American Homes
Assuming the 90 days trading horizon Amedeo Air Four is expected to generate 1.64 times more return on investment than American Homes. However, Amedeo Air is 1.64 times more volatile than American Homes 4. It trades about 0.11 of its potential returns per unit of risk. American Homes 4 is currently generating about -0.01 per unit of risk. If you would invest 4,230 in Amedeo Air Four on November 28, 2024 and sell it today you would earn a total of 1,750 from holding Amedeo Air Four or generate 41.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 96.43% |
| Values | Daily Returns |
Amedeo Air Four vs. American Homes 4
Performance |
| Timeline |
| Amedeo Air Four |
| American Homes 4 |
Amedeo Air and American Homes Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Amedeo Air and American Homes
The main advantage of trading using opposite Amedeo Air and American Homes positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amedeo Air 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.| Amedeo Air vs. Mobile Tornado Group | Amedeo Air vs. Morgan Advanced Materials | Amedeo Air vs. Playtech Plc | Amedeo Air vs. Ubisoft Entertainment |
| American Homes vs. Systemair AB | American Homes vs. Tetragon Financial Group | American Homes vs. Nordic Semiconductor ASA | American Homes vs. Sparebank 1 SR |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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