Correlation Between Acco Brands and AMREP
Can any of the company-specific risk be diversified away by investing in both Acco Brands and AMREP 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 Acco Brands and AMREP into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Acco Brands and AMREP, you can compare the effects of market volatilities on Acco Brands and AMREP 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 Acco Brands with a short position of AMREP. Check out your portfolio center. Please also check ongoing floating volatility patterns of Acco Brands and AMREP.
Diversification Opportunities for Acco Brands and AMREP
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Acco and AMREP is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Acco Brands and AMREP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AMREP and Acco Brands 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 Acco Brands are associated (or correlated) with AMREP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AMREP has no effect on the direction of Acco Brands i.e., Acco Brands and AMREP go up and down completely randomly.
Pair Corralation between Acco Brands and AMREP
Given the investment horizon of 90 days Acco Brands is expected to generate 5.05 times less return on investment than AMREP. But when comparing it to its historical volatility, Acco Brands is 1.27 times less risky than AMREP. It trades about 0.02 of its potential returns per unit of risk. AMREP is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 1,101 in AMREP on August 30, 2024 and sell it today you would earn a total of 2,439 from holding AMREP or generate 221.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Acco Brands vs. AMREP
Performance |
| Timeline |
| Acco Brands |
| AMREP |
Acco Brands and AMREP Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Acco Brands and AMREP
The main advantage of trading using opposite Acco Brands and AMREP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Acco Brands position performs unexpectedly, AMREP 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 AMREP will offset losses from the drop in AMREP's long position.| Acco Brands vs. HNI Corp | Acco Brands vs. Steelcase | Acco Brands vs. Ennis Inc | Acco Brands vs. Acacia Research |
| AMREP vs. Landsea Homes Corp | AMREP vs. Forestar Group | AMREP vs. Five Point Holdings | AMREP vs. American Realty Investors |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
Other Complementary Tools
| CEOs Directory Screen CEOs from public companies around the world | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity |