Correlation Between Alset Ehome and Murano Global

Can any of the company-specific risk be diversified away by investing in both Alset Ehome and Murano Global 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 Murano Global 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 Murano Global Investments, you can compare the effects of market volatilities on Alset Ehome and Murano Global 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 Murano Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alset Ehome and Murano Global.

Diversification Opportunities for Alset Ehome and Murano Global

-0.66

Correlation Coefficient

Alset Ehome  Murano Global

Excellent diversification

The 3 months correlation between Alset and Murano is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Alset Ehome International and Murano Global Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Murano Global Investments 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 Murano Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Murano Global Investments has no effect on the direction of Alset Ehome i.e., Alset Ehome and Murano Global go up and down completely randomly.

Pair Corralation between Alset Ehome and Murano Global

Considering the 90-day investment horizon Alset Ehome International is expected to generate 5.54 times more return on investment than Murano Global. However, Alset Ehome is 5.54 times more volatile than Murano Global Investments. It trades about 0.04 of its potential returns per unit of risk. Murano Global Investments is currently generating about 0.07 per unit of risk. If you would invest  127.00  in Alset Ehome International on October 6, 2024 and sell it today you would lose (9.00) from holding Alset Ehome International or give up 7.09% of portfolio value over 90 days.

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

Alset Ehome International  vs.  Murano Global Investments

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 latest weak performance, the Stock's technical and fundamental indicators remain strong and the recent confusion on Wall Street may also be a sign of long-lasting gains for the firm traders.

Murano Global Investments

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Murano Global Investments are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of very unsteady basic indicators, Murano Global displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Alset Ehome and Murano Global

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

The idea behind Alset Ehome International and Murano Global Investments 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.