Correlation Between Ready Capital and AMREP
Can any of the company-specific risk be diversified away by investing in both Ready Capital 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 Ready Capital and AMREP into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ready Capital Corp and AMREP, you can compare the effects of market volatilities on Ready Capital 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 Ready Capital with a short position of AMREP. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ready Capital and AMREP.
Diversification Opportunities for Ready Capital and AMREP
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Ready and AMREP is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Ready Capital Corp and AMREP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AMREP and Ready 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 Ready Capital 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 Ready Capital i.e., Ready Capital and AMREP go up and down completely randomly.
Pair Corralation between Ready Capital and AMREP
Allowing for the 90-day total investment horizon Ready Capital is expected to generate 2.79 times less return on investment than AMREP. But when comparing it to its historical volatility, Ready Capital Corp is 2.84 times less risky than AMREP. It trades about 0.19 of its potential returns per unit of risk. AMREP is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 3,000 in AMREP on August 28, 2024 and sell it today you would earn a total of 541.00 from holding AMREP or generate 18.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ready Capital Corp vs. AMREP
Performance |
| Timeline |
| Ready Capital Corp |
| AMREP |
Ready Capital and AMREP Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ready Capital and AMREP
The main advantage of trading using opposite Ready Capital and AMREP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ready Capital 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.| Ready Capital vs. Blackstone Mortgage Trust | Ready Capital vs. Omega Healthcare Investors | Ready Capital vs. Medical Properties Trust |
| 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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