Correlation Between ESGL Holdings and AMREP
Can any of the company-specific risk be diversified away by investing in both ESGL Holdings 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 ESGL Holdings and AMREP into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ESGL Holdings Limited and AMREP, you can compare the effects of market volatilities on ESGL Holdings 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 ESGL Holdings with a short position of AMREP. Check out your portfolio center. Please also check ongoing floating volatility patterns of ESGL Holdings and AMREP.
Diversification Opportunities for ESGL Holdings and AMREP
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between ESGL and AMREP is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding ESGL Holdings Limited and AMREP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AMREP and ESGL Holdings 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 ESGL Holdings Limited 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 ESGL Holdings i.e., ESGL Holdings and AMREP go up and down completely randomly.
Pair Corralation between ESGL Holdings and AMREP
Given the investment horizon of 90 days ESGL Holdings Limited is expected to under-perform the AMREP. In addition to that, ESGL Holdings is 1.19 times more volatile than AMREP. It trades about -0.14 of its total potential returns per unit of risk. AMREP is currently generating about 0.01 per unit of volatility. If you would invest 3,060 in AMREP on September 25, 2024 and sell it today you would lose (82.00) from holding AMREP or give up 2.68% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 98.44% |
Values | Daily Returns |
ESGL Holdings Limited vs. AMREP
Performance |
Timeline |
ESGL Holdings Limited |
AMREP |
ESGL Holdings and AMREP Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with ESGL Holdings and AMREP
The main advantage of trading using opposite ESGL Holdings and AMREP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ESGL Holdings 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.ESGL Holdings vs. Genpact Limited | ESGL Holdings vs. Broadridge Financial Solutions | ESGL Holdings vs. BrightView Holdings | ESGL Holdings vs. First Advantage Corp |
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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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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