Correlation Between Amer Sports, and Meritage
Can any of the company-specific risk be diversified away by investing in both Amer Sports, and Meritage 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 Meritage into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Amer Sports, and Meritage, you can compare the effects of market volatilities on Amer Sports, and Meritage 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 Meritage. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amer Sports, and Meritage.
Diversification Opportunities for Amer Sports, and Meritage
-0.72 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Amer and Meritage is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding Amer Sports, and Meritage in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Meritage 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 Meritage. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Meritage has no effect on the direction of Amer Sports, i.e., Amer Sports, and Meritage go up and down completely randomly.
Pair Corralation between Amer Sports, and Meritage
Allowing for the 90-day total investment horizon Amer Sports, is expected to generate 1.14 times more return on investment than Meritage. However, Amer Sports, is 1.14 times more volatile than Meritage. It trades about 0.36 of its potential returns per unit of risk. Meritage is currently generating about 0.17 per unit of risk. If you would invest 2,796 in Amer Sports, on November 1, 2024 and sell it today you would earn a total of 481.00 from holding Amer Sports, or generate 17.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.0% |
| Values | Daily Returns |
Amer Sports, vs. Meritage
Performance |
| Timeline |
| Amer Sports, |
| Meritage |
Amer Sports, and Meritage Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Amer Sports, and Meritage
The main advantage of trading using opposite Amer Sports, and Meritage positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amer Sports, position performs unexpectedly, Meritage 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 Meritage will offset losses from the drop in Meritage's long position.| Amer Sports, vs. Mediag3 | Amer Sports, vs. HNI Corp | Amer Sports, vs. Emerson Electric | Amer Sports, vs. EastGroup Properties |
| Meritage vs. TRI Pointe Homes | Meritage vs. MI Homes | Meritage vs. Beazer Homes USA | Meritage vs. Century Communities |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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