Correlation Between Amer Sports, and Lennar
Can any of the company-specific risk be diversified away by investing in both Amer Sports, and Lennar 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 Amer Sports, and Lennar into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Amer Sports, and Lennar, you can compare the effects of market volatilities on Amer Sports, and Lennar 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 Amer Sports, with a short position of Lennar. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amer Sports, and Lennar.
Diversification Opportunities for Amer Sports, and Lennar
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Amer and Lennar is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Amer Sports, and Lennar in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lennar and Amer Sports, 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 Amer Sports, are associated (or correlated) with Lennar. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lennar has no effect on the direction of Amer Sports, i.e., Amer Sports, and Lennar go up and down completely randomly.
Pair Corralation between Amer Sports, and Lennar
Allowing for the 90-day total investment horizon Amer Sports, is expected to generate 1.74 times more return on investment than Lennar. However, Amer Sports, is 1.74 times more volatile than Lennar. It trades about 0.11 of its potential returns per unit of risk. Lennar is currently generating about 0.1 per unit of risk. If you would invest 1,340 in Amer Sports, on August 31, 2024 and sell it today you would earn a total of 1,247 from holding Amer Sports, or generate 93.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 42.42% |
| Values | Daily Returns |
Amer Sports, vs. Lennar
Performance |
| Timeline |
| Amer Sports, |
| Lennar |
Amer Sports, and Lennar Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Amer Sports, and Lennar
The main advantage of trading using opposite Amer Sports, and Lennar positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amer Sports, position performs unexpectedly, Lennar 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 Lennar will offset losses from the drop in Lennar's long position.| Amer Sports, vs. National CineMedia | Amer Sports, vs. 51Talk Online Education | Amer Sports, vs. Triton International Limited | Amer Sports, vs. WiMi Hologram Cloud |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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