Correlation Between Bayport International and American Realty
Can any of the company-specific risk be diversified away by investing in both Bayport International and American Realty 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 Bayport International and American Realty into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bayport International Holdings and American Realty Investors, you can compare the effects of market volatilities on Bayport International and American Realty 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 Bayport International with a short position of American Realty. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bayport International and American Realty.
Diversification Opportunities for Bayport International and American Realty
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between Bayport and American is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Bayport International Holdings and American Realty Investors in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Realty Investors and Bayport International 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 Bayport International Holdings are associated (or correlated) with American Realty. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Realty Investors has no effect on the direction of Bayport International i.e., Bayport International and American Realty go up and down completely randomly.
Pair Corralation between Bayport International and American Realty
Given the investment horizon of 90 days Bayport International Holdings is expected to under-perform the American Realty. In addition to that, Bayport International is 4.99 times more volatile than American Realty Investors. It trades about -0.21 of its total potential returns per unit of risk. American Realty Investors is currently generating about 0.29 per unit of volatility. If you would invest 1,371 in American Realty Investors on August 31, 2024 and sell it today you would earn a total of 261.00 from holding American Realty Investors or generate 19.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bayport International Holdings vs. American Realty Investors
Performance |
| Timeline |
| Bayport International |
| American Realty Investors |
Bayport International and American Realty Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bayport International and American Realty
The main advantage of trading using opposite Bayport International and American Realty positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bayport International position performs unexpectedly, American Realty 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 American Realty will offset losses from the drop in American Realty's long position.| Bayport International vs. HUMANA INC | Bayport International vs. SCOR PK | Bayport International vs. Aquagold International | Bayport International vs. Thrivent High Yield |
| American Realty vs. Forestar Group | American Realty vs. Landsea Homes Corp | American Realty vs. Five Point Holdings | American Realty vs. AMREP |
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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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