Correlation Between American Homes and Cresud SACIF
Can any of the company-specific risk be diversified away by investing in both American Homes and Cresud SACIF 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 Cresud SACIF 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 Cresud SACIF y, you can compare the effects of market volatilities on American Homes and Cresud SACIF 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 Cresud SACIF. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Homes and Cresud SACIF.
Diversification Opportunities for American Homes and Cresud SACIF
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between American and Cresud is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding American Homes 4 and Cresud SACIF y in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cresud SACIF y 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 Cresud SACIF. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cresud SACIF y has no effect on the direction of American Homes i.e., American Homes and Cresud SACIF go up and down completely randomly.
Pair Corralation between American Homes and Cresud SACIF
Considering the 90-day investment horizon American Homes is expected to generate 59.26 times less return on investment than Cresud SACIF. But when comparing it to its historical volatility, American Homes 4 is 2.11 times less risky than Cresud SACIF. It trades about 0.01 of its potential returns per unit of risk. Cresud SACIF y is currently generating about 0.37 of returns per unit of risk over similar time horizon. If you would invest 932.00 in Cresud SACIF y on August 29, 2024 and sell it today you would earn a total of 256.00 from holding Cresud SACIF y or generate 27.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
American Homes 4 vs. Cresud SACIF y
Performance |
| Timeline |
| American Homes 4 |
| Cresud SACIF y |
American Homes and Cresud SACIF Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Homes and Cresud SACIF
The main advantage of trading using opposite American Homes and Cresud SACIF positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Homes position performs unexpectedly, Cresud SACIF 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 Cresud SACIF will offset losses from the drop in Cresud SACIF's long position.| American Homes vs. Nexpoint Residential Trust | American Homes vs. Centerspace | American Homes vs. Clipper Realty | American Homes vs. Equity Lifestyle Properties |
| Cresud SACIF vs. Steel Partners Holdings | Cresud SACIF vs. Compass Diversified | Cresud SACIF vs. Brookfield Business Partners | Cresud SACIF vs. Matthews International |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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