Correlation Between AMREP and Five Point
Can any of the company-specific risk be diversified away by investing in both AMREP and Five Point 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 Five Point into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AMREP and Five Point Holdings, you can compare the effects of market volatilities on AMREP and Five Point 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 Five Point. Check out your portfolio center. Please also check ongoing floating volatility patterns of AMREP and Five Point.
Diversification Opportunities for AMREP and Five Point
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between AMREP and Five is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding AMREP and Five Point Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Five Point Holdings 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 Five Point. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Five Point Holdings has no effect on the direction of AMREP i.e., AMREP and Five Point go up and down completely randomly.
Pair Corralation between AMREP and Five Point
Considering the 90-day investment horizon AMREP is expected to generate 1.93 times more return on investment than Five Point. However, AMREP is 1.93 times more volatile than Five Point Holdings. It trades about 0.28 of its potential returns per unit of risk. Five Point Holdings is currently generating about 0.04 per unit of risk. If you would invest 2,824 in AMREP on August 24, 2024 and sell it today you would earn a total of 862.00 from holding AMREP or generate 30.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
AMREP vs. Five Point Holdings
Performance |
| Timeline |
| AMREP |
| Five Point Holdings |
AMREP and Five Point Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AMREP and Five Point
The main advantage of trading using opposite AMREP and Five Point positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AMREP position performs unexpectedly, Five Point 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 Five Point will offset losses from the drop in Five Point's long position.| AMREP vs. Landsea Homes Corp | AMREP vs. Forestar Group | AMREP vs. Five Point Holdings | AMREP vs. American Realty Investors |
| Five Point vs. Landsea Homes Corp | Five Point vs. AMREP | Five Point vs. American Realty Investors | Five Point vs. Forestar Group |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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