Correlation Between A1MT34 and Apartment Investment

Can any of the company-specific risk be diversified away by investing in both A1MT34 and Apartment Investment 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 A1MT34 and Apartment Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between A1MT34 and Apartment Investment and, you can compare the effects of market volatilities on A1MT34 and Apartment Investment 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 A1MT34 with a short position of Apartment Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of A1MT34 and Apartment Investment.

Diversification Opportunities for A1MT34 and Apartment Investment

-0.38

Correlation Coefficient

A1MT34  Apartment Investment

Very good diversification

The 3 months correlation between A1MT34 and Apartment is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding A1MT34 and Apartment Investment and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Apartment Investment and and A1MT34 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 A1MT34 are associated (or correlated) with Apartment Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Apartment Investment and has no effect on the direction of A1MT34 i.e., A1MT34 and Apartment Investment go up and down completely randomly.

Pair Corralation between A1MT34 and Apartment Investment

Assuming the 90 days trading horizon A1MT34 is expected to generate 1.36 times more return on investment than Apartment Investment. However, A1MT34 is 1.36 times more volatile than Apartment Investment and. It trades about 0.02 of its potential returns per unit of risk. Apartment Investment and is currently generating about 0.02 per unit of risk. If you would invest  10,322  in A1MT34 on September 26, 2024 and sell it today you would earn a total of  78.00  from holding A1MT34 or generate 0.76% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

A1MT34  vs.  Apartment Investment and

A1MT34

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days A1MT34 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's primary indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Apartment Investment and

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Apartment Investment and has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong forward indicators, Apartment Investment is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with A1MT34 and Apartment Investment

The main advantage of trading using opposite A1MT34 and Apartment Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if A1MT34 position performs unexpectedly, Apartment Investment 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 Apartment Investment will offset losses from the drop in Apartment Investment's long position.

The idea behind A1MT34 and Apartment Investment and 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.

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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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.