Correlation Between AGRICULTBK HADR25 and American Homes
Can any of the company-specific risk be diversified away by investing in both AGRICULTBK HADR25 and American Homes 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 AGRICULTBK HADR25 and American Homes into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AGRICULTBK HADR25 YC and American Homes 4, you can compare the effects of market volatilities on AGRICULTBK HADR25 and American Homes 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 AGRICULTBK HADR25 with a short position of American Homes. Check out your portfolio center. Please also check ongoing floating volatility patterns of AGRICULTBK HADR25 and American Homes.
Diversification Opportunities for AGRICULTBK HADR25 and American Homes
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between AGRICULTBK and American is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding AGRICULTBK HADR25 YC and American Homes 4 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Homes 4 and AGRICULTBK HADR25 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 AGRICULTBK HADR25 YC are associated (or correlated) with American Homes. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Homes 4 has no effect on the direction of AGRICULTBK HADR25 i.e., AGRICULTBK HADR25 and American Homes go up and down completely randomly.
Pair Corralation between AGRICULTBK HADR25 and American Homes
Assuming the 90 days trading horizon AGRICULTBK HADR25 YC is expected to generate 1.41 times more return on investment than American Homes. However, AGRICULTBK HADR25 is 1.41 times more volatile than American Homes 4. It trades about 0.21 of its potential returns per unit of risk. American Homes 4 is currently generating about -0.14 per unit of risk. If you would invest 1,084 in AGRICULTBK HADR25 YC on October 30, 2024 and sell it today you would earn a total of 186.00 from holding AGRICULTBK HADR25 YC or generate 17.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
AGRICULTBK HADR25 YC vs. American Homes 4
Performance |
| Timeline |
| AGRICULTBK HADR25 |
| American Homes 4 |
AGRICULTBK HADR25 and American Homes Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AGRICULTBK HADR25 and American Homes
The main advantage of trading using opposite AGRICULTBK HADR25 and American Homes positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AGRICULTBK HADR25 position performs unexpectedly, American Homes 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 Homes will offset losses from the drop in American Homes' long position.| AGRICULTBK HADR25 vs. CITY OFFICE REIT | AGRICULTBK HADR25 vs. American Public Education | AGRICULTBK HADR25 vs. HOME DEPOT | AGRICULTBK HADR25 vs. Addus HomeCare |
| American Homes vs. Osisko Metals | American Homes vs. AEON METALS LTD | American Homes vs. PARKEN Sport Entertainment | American Homes vs. alstria office REIT AG |
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 Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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