Correlation Between Alset Ehome and AMREP

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

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

Diversification Opportunities for Alset Ehome and AMREP

-0.56

Correlation Coefficient

Alset Ehome  AMREP

Excellent diversification

The 3 months correlation between Alset and AMREP is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Alset Ehome International and AMREP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AMREP and Alset Ehome 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 Alset Ehome International 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 Alset Ehome i.e., Alset Ehome and AMREP go up and down completely randomly.

Pair Corralation between Alset Ehome and AMREP

Considering the 90-day investment horizon Alset Ehome is expected to generate 3.28 times less return on investment than AMREP. In addition to that, Alset Ehome is 2.34 times more volatile than AMREP. It trades about 0.01 of its total potential returns per unit of risk. AMREP is currently generating about 0.08 per unit of volatility. If you would invest  1,196  in AMREP on October 4, 2024 and sell it today you would earn a total of  1,944  from holding AMREP or generate 162.54% return on investment over 90 days.

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

Alset Ehome International  vs.  AMREP

Alset Ehome International

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Alset Ehome International has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's technical and fundamental indicators remain fairly strong which may send shares a bit higher in February 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

AMREP

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in AMREP are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Even with relatively unfluctuating basic indicators, AMREP may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Alset Ehome and AMREP

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

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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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.