Correlation Between AMREP and Emerson Radio
Can any of the company-specific risk be diversified away by investing in both AMREP and Emerson Radio 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 Emerson Radio into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AMREP and Emerson Radio, you can compare the effects of market volatilities on AMREP and Emerson Radio 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 Emerson Radio. Check out your portfolio center. Please also check ongoing floating volatility patterns of AMREP and Emerson Radio.
Diversification Opportunities for AMREP and Emerson Radio
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between AMREP and Emerson is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding AMREP and Emerson Radio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Emerson Radio 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 Emerson Radio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Emerson Radio has no effect on the direction of AMREP i.e., AMREP and Emerson Radio go up and down completely randomly.
Pair Corralation between AMREP and Emerson Radio
Considering the 90-day investment horizon AMREP is expected to generate 1.62 times more return on investment than Emerson Radio. However, AMREP is 1.62 times more volatile than Emerson Radio. It trades about 0.29 of its potential returns per unit of risk. Emerson Radio is currently generating about -0.26 per unit of risk. If you would invest 2,830 in AMREP on August 25, 2024 and sell it today you would earn a total of 890.00 from holding AMREP or generate 31.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
AMREP vs. Emerson Radio
Performance |
| Timeline |
| AMREP |
| Emerson Radio |
AMREP and Emerson Radio Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AMREP and Emerson Radio
The main advantage of trading using opposite AMREP and Emerson Radio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AMREP position performs unexpectedly, Emerson Radio 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 Emerson Radio will offset losses from the drop in Emerson Radio's long position.| AMREP vs. Landsea Homes Corp | AMREP vs. Forestar Group | AMREP vs. Five Point Holdings | AMREP vs. American Realty Investors |
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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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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