Correlation Between American Homes and MICRONIC MYDATA
Can any of the company-specific risk be diversified away by investing in both American Homes and MICRONIC MYDATA 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 American Homes and MICRONIC MYDATA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Homes 4 and MICRONIC MYDATA, you can compare the effects of market volatilities on American Homes and MICRONIC MYDATA 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 American Homes with a short position of MICRONIC MYDATA. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Homes and MICRONIC MYDATA.
Diversification Opportunities for American Homes and MICRONIC MYDATA
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between American and MICRONIC is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding American Homes 4 and MICRONIC MYDATA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MICRONIC MYDATA and American Homes 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 American Homes 4 are associated (or correlated) with MICRONIC MYDATA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MICRONIC MYDATA has no effect on the direction of American Homes i.e., American Homes and MICRONIC MYDATA go up and down completely randomly.
Pair Corralation between American Homes and MICRONIC MYDATA
Assuming the 90 days trading horizon American Homes is expected to generate 3.06 times less return on investment than MICRONIC MYDATA. But when comparing it to its historical volatility, American Homes 4 is 1.26 times less risky than MICRONIC MYDATA. It trades about 0.04 of its potential returns per unit of risk. MICRONIC MYDATA is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 2,266 in MICRONIC MYDATA on September 24, 2024 and sell it today you would earn a total of 1,206 from holding MICRONIC MYDATA or generate 53.22% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
American Homes 4 vs. MICRONIC MYDATA
Performance |
Timeline |
American Homes 4 |
MICRONIC MYDATA |
American Homes and MICRONIC MYDATA Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with American Homes and MICRONIC MYDATA
The main advantage of trading using opposite American Homes and MICRONIC MYDATA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Homes position performs unexpectedly, MICRONIC MYDATA 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 MICRONIC MYDATA will offset losses from the drop in MICRONIC MYDATA's long position.American Homes vs. Fevertree Drinks PLC | American Homes vs. MAGNUM MINING EXP | American Homes vs. United Breweries Co | American Homes vs. THAI BEVERAGE |
MICRONIC MYDATA vs. CODERE ONLINE LUX | MICRONIC MYDATA vs. UET United Electronic | MICRONIC MYDATA vs. MUTUIONLINE | MICRONIC MYDATA vs. ARROW ELECTRONICS |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
Other Complementary Tools
Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
Stocks Directory Find actively traded stocks across global markets | |
Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets |