Correlation Between AMREP and Sino Land

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

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

Diversification Opportunities for AMREP and Sino Land

0.04

Correlation Coefficient

AMREP  Sino Land

Significant diversification

The 3 months correlation between AMREP and Sino is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding AMREP and Sino Land Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sino Land and AMREP 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 AMREP are associated (or correlated) with Sino Land. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sino Land has no effect on the direction of AMREP i.e., AMREP and Sino Land go up and down completely randomly.

Pair Corralation between AMREP and Sino Land

Considering the 90-day investment horizon AMREP is expected to generate 1.29 times more return on investment than Sino Land. However, AMREP is 1.29 times more volatile than Sino Land Co. It trades about 0.16 of its potential returns per unit of risk. Sino Land Co is currently generating about 0.04 per unit of risk. If you would invest  2,613  in AMREP on September 16, 2024 and sell it today you would earn a total of  1,029  from holding AMREP or generate 39.38% return on investment over 90 days.

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

AMREP  vs.  Sino Land Co

AMREP

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in AMREP are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Even with relatively fragile basic indicators, AMREP reported solid returns over the last few months and may actually be approaching a breakup point.

Sino Land

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Sino Land Co are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of fairly inconsistent basic indicators, Sino Land may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with AMREP and Sino Land

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

The idea behind AMREP and Sino Land Co 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.

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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.