Correlation Between Xinyuan Real and AMREP
Can any of the company-specific risk be diversified away by investing in both Xinyuan Real 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 Xinyuan Real and AMREP into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Xinyuan Real Estate and AMREP, you can compare the effects of market volatilities on Xinyuan Real 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 Xinyuan Real with a short position of AMREP. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xinyuan Real and AMREP.
Diversification Opportunities for Xinyuan Real and AMREP
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Xinyuan and AMREP is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Xinyuan Real Estate and AMREP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AMREP and Xinyuan Real 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 Xinyuan Real Estate 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 Xinyuan Real i.e., Xinyuan Real and AMREP go up and down completely randomly.
Pair Corralation between Xinyuan Real and AMREP
Considering the 90-day investment horizon Xinyuan Real Estate is expected to under-perform the AMREP. But the stock apears to be less risky and, when comparing its historical volatility, Xinyuan Real Estate is 1.77 times less risky than AMREP. The stock trades about -0.33 of its potential returns per unit of risk. The AMREP is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest 2,948 in AMREP on August 30, 2024 and sell it today you would earn a total of 592.00 from holding AMREP or generate 20.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Xinyuan Real Estate vs. AMREP
Performance |
| Timeline |
| Xinyuan Real Estate |
| AMREP |
Xinyuan Real and AMREP Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xinyuan Real and AMREP
The main advantage of trading using opposite Xinyuan Real and AMREP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xinyuan Real 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.| Xinyuan Real vs. AMREP | Xinyuan Real vs. Alset Ehome International | Xinyuan Real vs. Landsea Homes Corp | Xinyuan Real vs. Bayport International Holdings |
| 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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