Correlation Between AMREP and Safe
Can any of the company-specific risk be diversified away by investing in both AMREP and Safe 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 Safe into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AMREP and Safe and Green, you can compare the effects of market volatilities on AMREP and Safe 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 Safe. Check out your portfolio center. Please also check ongoing floating volatility patterns of AMREP and Safe.
Diversification Opportunities for AMREP and Safe
Pay attention - limited upside
The 3 months correlation between AMREP and Safe is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding AMREP and Safe and Green in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Safe and Green 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 Safe. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Safe and Green has no effect on the direction of AMREP i.e., AMREP and Safe go up and down completely randomly.
Pair Corralation between AMREP and Safe
Considering the 90-day investment horizon AMREP is expected to generate 1.67 times less return on investment than Safe. But when comparing it to its historical volatility, AMREP is 11.22 times less risky than Safe. It trades about 0.1 of its potential returns per unit of risk. Safe and Green is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 13,200 in Safe and Green on September 4, 2024 and sell it today you would lose (12,977) from holding Safe and Green or give up 98.31% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 61.62% |
| Values | Daily Returns |
AMREP vs. Safe and Green
Performance |
| Timeline |
| AMREP |
| Safe and Green |
AMREP and Safe Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AMREP and Safe
The main advantage of trading using opposite AMREP and Safe positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AMREP position performs unexpectedly, Safe 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 Safe will offset losses from the drop in Safe's long position.| AMREP vs. Landsea Homes Corp | AMREP vs. Forestar Group | AMREP vs. Five Point Holdings | AMREP vs. American Realty Investors |
| Safe vs. MACOM Technology Solutions | Safe vs. FormFactor | Safe vs. Amkor Technology | Safe vs. Grupo Televisa SAB |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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