Correlation Between Safe and AMREP
Can any of the company-specific risk be diversified away by investing in both Safe 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 Safe and AMREP into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Safe and Green and AMREP, you can compare the effects of market volatilities on Safe 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 Safe with a short position of AMREP. Check out your portfolio center. Please also check ongoing floating volatility patterns of Safe and AMREP.
Diversification Opportunities for Safe and AMREP
Excellent diversification
The 3 months correlation between Safe and AMREP is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding Safe and Green and AMREP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AMREP and Safe 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 Safe and Green 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 Safe i.e., Safe and AMREP go up and down completely randomly.
Pair Corralation between Safe and AMREP
Considering the 90-day investment horizon Safe and Green is expected to under-perform the AMREP. In addition to that, Safe is 2.24 times more volatile than AMREP. It trades about -0.2 of its total potential returns per unit of risk. AMREP is currently generating about 0.28 per unit of volatility. If you would invest 2,824 in AMREP on August 24, 2024 and sell it today you would earn a total of 862.00 from holding AMREP or generate 30.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Safe and Green vs. AMREP
Performance |
| Timeline |
| Safe and Green |
| AMREP |
Safe and AMREP Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Safe and AMREP
The main advantage of trading using opposite Safe and AMREP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Safe 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.The idea behind Safe and Green and AMREP pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| AMREP vs. Landsea Homes Corp | AMREP vs. Forestar Group | AMREP vs. Five Point Holdings | AMREP vs. American Realty Investors |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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