Correlation Between AMREP and AviChina Industry
Can any of the company-specific risk be diversified away by investing in both AMREP and AviChina Industry 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 AMREP and AviChina Industry into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AMREP and AviChina Industry Technology, you can compare the effects of market volatilities on AMREP and AviChina Industry 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 AMREP with a short position of AviChina Industry. Check out your portfolio center. Please also check ongoing floating volatility patterns of AMREP and AviChina Industry.
Diversification Opportunities for AMREP and AviChina Industry
-0.7 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between AMREP and AviChina is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding AMREP and AviChina Industry Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AviChina Industry and AMREP 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 AMREP are associated (or correlated) with AviChina Industry. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AviChina Industry has no effect on the direction of AMREP i.e., AMREP and AviChina Industry go up and down completely randomly.
Pair Corralation between AMREP and AviChina Industry
Considering the 90-day investment horizon AMREP is expected to generate 1.33 times more return on investment than AviChina Industry. However, AMREP is 1.33 times more volatile than AviChina Industry Technology. It trades about 0.03 of its potential returns per unit of risk. AviChina Industry Technology is currently generating about -0.22 per unit of risk. If you would invest 3,558 in AMREP on September 13, 2024 and sell it today you would earn a total of 31.00 from holding AMREP or generate 0.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
AMREP vs. AviChina Industry Technology
Performance |
| Timeline |
| AMREP |
| AviChina Industry |
AMREP and AviChina Industry Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AMREP and AviChina Industry
The main advantage of trading using opposite AMREP and AviChina Industry positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AMREP position performs unexpectedly, AviChina Industry 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 AviChina Industry will offset losses from the drop in AviChina Industry's long position.| AMREP vs. Landsea Homes Corp | AMREP vs. Forestar Group | AMREP vs. Five Point Holdings | AMREP vs. American Realty Investors |
| AviChina Industry vs. BJs Restaurants | AviChina Industry vs. Inhibrx | AviChina Industry vs. Playa Hotels Resorts | AviChina Industry vs. Dennys Corp |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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