Correlation Between ACRES Commercial and Multi Ways

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

By analyzing existing cross correlation between ACRES Commercial Realty and Multi Ways Holdings, you can compare the effects of market volatilities on ACRES Commercial and Multi Ways 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 ACRES Commercial with a short position of Multi Ways. Check out your portfolio center. Please also check ongoing floating volatility patterns of ACRES Commercial and Multi Ways.

Diversification Opportunities for ACRES Commercial and Multi Ways

0.44

Correlation Coefficient

ACRES Commercial  Multi Ways

Very weak diversification

The 3 months correlation between ACRES and Multi is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding ACRES Commercial Realty and Multi Ways Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Multi Ways Holdings and ACRES Commercial 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 ACRES Commercial Realty are associated (or correlated) with Multi Ways. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Multi Ways Holdings has no effect on the direction of ACRES Commercial i.e., ACRES Commercial and Multi Ways go up and down completely randomly.

Pair Corralation between ACRES Commercial and Multi Ways

Assuming the 90 days trading horizon ACRES Commercial is expected to generate 4.65 times less return on investment than Multi Ways. But when comparing it to its historical volatility, ACRES Commercial Realty is 18.54 times less risky than Multi Ways. It trades about 0.28 of its potential returns per unit of risk. Multi Ways Holdings is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  28.00  in Multi Ways Holdings on December 27, 2024 and sell it today you would earn a total of  4.00  from holding Multi Ways Holdings or generate 14.29% return on investment over 90 days.

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

ACRES Commercial Realty  vs.  Multi Ways Holdings

ACRES Commercial Realty

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in ACRES Commercial Realty are ranked lower than 22 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound basic indicators, ACRES Commercial is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

Multi Ways Holdings

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Multi Ways Holdings are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak basic indicators, Multi Ways reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with ACRES Commercial and Multi Ways

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

The idea behind ACRES Commercial Realty and Multi Ways Holdings 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.