Correlation Between Landsea Homes and AMREP
Can any of the company-specific risk be diversified away by investing in both Landsea Homes 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 Landsea Homes and AMREP into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Landsea Homes Corp and AMREP, you can compare the effects of market volatilities on Landsea Homes 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 Landsea Homes with a short position of AMREP. Check out your portfolio center. Please also check ongoing floating volatility patterns of Landsea Homes and AMREP.
Diversification Opportunities for Landsea Homes and AMREP
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Landsea and AMREP is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Landsea Homes Corp and AMREP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AMREP and Landsea Homes 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 Landsea Homes Corp 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 Landsea Homes i.e., Landsea Homes and AMREP go up and down completely randomly.
Pair Corralation between Landsea Homes and AMREP
Given the investment horizon of 90 days Landsea Homes is expected to generate 1.54 times less return on investment than AMREP. In addition to that, Landsea Homes is 1.07 times more volatile than AMREP. It trades about 0.06 of its total potential returns per unit of risk. AMREP is currently generating about 0.1 per unit of volatility. If you would invest 1,111 in AMREP on August 27, 2024 and sell it today you would earn a total of 2,609 from holding AMREP or generate 234.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Landsea Homes Corp vs. AMREP
Performance |
| Timeline |
| Landsea Homes Corp |
| AMREP |
Landsea Homes and AMREP Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Landsea Homes and AMREP
The main advantage of trading using opposite Landsea Homes and AMREP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Landsea Homes 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.| Landsea Homes vs. GCM Grosvenor | Landsea Homes vs. AerSale Corp | Landsea Homes vs. Arko Corp | Landsea Homes vs. Advantage Solutions |
| AMREP vs. Park Electrochemical | AMREP vs. Innovative Solutions and | AMREP vs. Curtiss Wright | AMREP vs. National Presto Industries |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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