Correlation Between 737446AQ7 and AMREP

Can any of the company-specific risk be diversified away by investing in both 737446AQ7 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 737446AQ7 and AMREP into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Post Holdings 4625 and AMREP, you can compare the effects of market volatilities on 737446AQ7 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 737446AQ7 with a short position of AMREP. Check out your portfolio center. Please also check ongoing floating volatility patterns of 737446AQ7 and AMREP.

Diversification Opportunities for 737446AQ7 and AMREP

-0.43

Correlation Coefficient

737446AQ7  AMREP

Very good diversification

The 3 months correlation between 737446AQ7 and AMREP is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Post Holdings 4625 and AMREP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AMREP and 737446AQ7 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 Post Holdings 4625 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 737446AQ7 i.e., 737446AQ7 and AMREP go up and down completely randomly.

Pair Corralation between 737446AQ7 and AMREP

Assuming the 90 days trading horizon Post Holdings 4625 is expected to under-perform the AMREP. But the bond apears to be less risky and, when comparing its historical volatility, Post Holdings 4625 is 6.07 times less risky than AMREP. The bond trades about -0.19 of its potential returns per unit of risk. The AMREP is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest  2,609  in AMREP on September 18, 2024 and sell it today you would earn a total of  718.00  from holding AMREP or generate 27.52% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	98.44%
Values	Daily Returns

Post Holdings 4625  vs.  AMREP

Post Holdings 4625

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Post Holdings 4625 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest inconsistent performance, the Bond's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for Post Holdings 4625 investors.

AMREP

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in AMREP are ranked lower than 9 (%) 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.

Pair Trading with 737446AQ7 and AMREP

The main advantage of trading using opposite 737446AQ7 and AMREP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 737446AQ7 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.

The idea behind Post Holdings 4625 and AMREP 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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.