Correlation Between Oakley Capital and American Homes
Can any of the company-specific risk be diversified away by investing in both Oakley Capital 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 Oakley Capital and American Homes into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Oakley Capital Investments and American Homes 4, you can compare the effects of market volatilities on Oakley Capital 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 Oakley Capital with a short position of American Homes. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oakley Capital and American Homes.
Diversification Opportunities for Oakley Capital and American Homes
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Oakley and American is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Oakley Capital Investments 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 Oakley Capital 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 Oakley Capital Investments 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 Oakley Capital i.e., Oakley Capital and American Homes go up and down completely randomly.
Pair Corralation between Oakley Capital and American Homes
Assuming the 90 days trading horizon Oakley Capital is expected to generate 2.29 times less return on investment than American Homes. But when comparing it to its historical volatility, Oakley Capital Investments is 1.11 times less risky than American Homes. It trades about 0.02 of its potential returns per unit of risk. American Homes 4 is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 3,312 in American Homes 4 on September 2, 2024 and sell it today you would earn a total of 547.00 from holding American Homes 4 or generate 16.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 91.51% |
| Values | Daily Returns |
Oakley Capital Investments vs. American Homes 4
Performance |
| Timeline |
| Oakley Capital Inves |
| American Homes 4 |
Oakley Capital and American Homes Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Oakley Capital and American Homes
The main advantage of trading using opposite Oakley Capital and American Homes positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Oakley Capital 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.| Oakley Capital vs. Toyota Motor Corp | Oakley Capital vs. SoftBank Group Corp | Oakley Capital vs. OTP Bank Nyrt | Oakley Capital vs. Las Vegas Sands |
| American Homes vs. Gaztransport et Technigaz | American Homes vs. Fevertree Drinks Plc | American Homes vs. Samsung Electronics Co | American Homes vs. Molson Coors Beverage |
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 Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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