Correlation Between Intergroup and American Realty
Can any of the company-specific risk be diversified away by investing in both Intergroup 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 Intergroup and American Realty into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The Intergroup and American Realty Investors, you can compare the effects of market volatilities on Intergroup 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 Intergroup with a short position of American Realty. Check out your portfolio center. Please also check ongoing floating volatility patterns of Intergroup and American Realty.
Diversification Opportunities for Intergroup and American Realty
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Intergroup and American is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding The Intergroup 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 Intergroup 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 The Intergroup 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 Intergroup i.e., Intergroup and American Realty go up and down completely randomly.
Pair Corralation between Intergroup and American Realty
Given the investment horizon of 90 days The Intergroup is expected to generate 0.5 times more return on investment than American Realty. However, The Intergroup is 1.99 times less risky than American Realty. It trades about 0.04 of its potential returns per unit of risk. American Realty Investors is currently generating about 0.01 per unit of risk. If you would invest 1,381 in The Intergroup on August 24, 2024 and sell it today you would earn a total of 17.00 from holding The Intergroup or generate 1.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
The Intergroup vs. American Realty Investors
Performance |
| Timeline |
| Intergroup |
| American Realty Investors |
Intergroup and American Realty Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Intergroup and American Realty
The main advantage of trading using opposite Intergroup and American Realty positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Intergroup 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.| Intergroup vs. Huazhu Group | Intergroup vs. Atour Lifestyle Holdings | Intergroup vs. LuxUrban Hotels | Intergroup vs. InterContinental Hotels Group |
| 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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