Correlation Between Apartment Investment and American Homes
Can any of the company-specific risk be diversified away by investing in both Apartment Investment and American Homes 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 Apartment Investment and American Homes into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Apartment Investment and and American Homes 4, you can compare the effects of market volatilities on Apartment Investment and American Homes 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 Apartment Investment with a short position of American Homes. Check out your portfolio center. Please also check ongoing floating volatility patterns of Apartment Investment and American Homes.
Diversification Opportunities for Apartment Investment and American Homes
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Apartment and American is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Apartment Investment and and American Homes 4 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Homes 4 and Apartment Investment 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 Apartment Investment and are associated (or correlated) with American Homes. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Homes 4 has no effect on the direction of Apartment Investment i.e., Apartment Investment and American Homes go up and down completely randomly.
Pair Corralation between Apartment Investment and American Homes
Considering the 90-day investment horizon Apartment Investment and is expected to generate 1.91 times more return on investment than American Homes. However, Apartment Investment is 1.91 times more volatile than American Homes 4. It trades about 0.02 of its potential returns per unit of risk. American Homes 4 is currently generating about -0.05 per unit of risk. If you would invest 801.00 in Apartment Investment and on January 25, 2024 and sell it today you would earn a total of 3.00 from holding Apartment Investment and or generate 0.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Apartment Investment and vs. American Homes 4
Performance |
| Timeline |
| Apartment Investment and |
| American Homes 4 |
Apartment Investment and American Homes Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Apartment Investment and American Homes
The main advantage of trading using opposite Apartment Investment and American Homes positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Apartment Investment position performs unexpectedly, American Homes 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 American Homes will offset losses from the drop in American Homes' long position.| Apartment Investment vs. Clipper Realty | Apartment Investment vs. Independence Realty Trust | Apartment Investment vs. BRT Realty Trust | Apartment Investment vs. UDR Inc |
| American Homes vs. Sun Communities | American Homes vs. Clipper Realty | American Homes vs. UDR Inc | American Homes vs. UMH Properties |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
Other Complementary Tools
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk |