Correlation Between Equifax and AMREP
Can any of the company-specific risk be diversified away by investing in both Equifax and AMREP 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 Equifax and AMREP into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Equifax and AMREP, you can compare the effects of market volatilities on Equifax and AMREP 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 Equifax with a short position of AMREP. Check out your portfolio center. Please also check ongoing floating volatility patterns of Equifax and AMREP.
Diversification Opportunities for Equifax and AMREP
Pay attention - limited upside
The 3 months correlation between Equifax and AMREP is -0.81. Overlapping area represents the amount of risk that can be diversified away by holding Equifax and AMREP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AMREP and Equifax 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 Equifax are associated (or correlated) with AMREP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AMREP has no effect on the direction of Equifax i.e., Equifax and AMREP go up and down completely randomly.
Pair Corralation between Equifax and AMREP
Considering the 90-day investment horizon Equifax is expected to under-perform the AMREP. But the stock apears to be less risky and, when comparing its historical volatility, Equifax is 2.65 times less risky than AMREP. The stock trades about -0.14 of its potential returns per unit of risk. The AMREP is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest 2,210 in AMREP on September 2, 2024 and sell it today you would earn a total of 1,394 from holding AMREP or generate 63.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Equifax vs. AMREP
Performance |
| Timeline |
| Equifax |
| AMREP |
Equifax and AMREP Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Equifax and AMREP
The main advantage of trading using opposite Equifax and AMREP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Equifax position performs unexpectedly, AMREP 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 AMREP will offset losses from the drop in AMREP's long position.| Equifax vs. Verisk Analytics | Equifax vs. Exponent | Equifax vs. FTI Consulting | Equifax vs. Franklin Covey |
| AMREP vs. Landsea Homes Corp | AMREP vs. Forestar Group | AMREP vs. Five Point Holdings | AMREP vs. American Realty Investors |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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