Correlation Between American International and Greystone Housing

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

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

Diversification Opportunities for American International and Greystone Housing

-0.2

Correlation Coefficient

American International  Greystone Housing

Good diversification

The 3 months correlation between American and Greystone is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding American International Group and Greystone Housing Impact in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Greystone Housing Impact and American International 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 American International Group are associated (or correlated) with Greystone Housing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Greystone Housing Impact has no effect on the direction of American International i.e., American International and Greystone Housing go up and down completely randomly.

Pair Corralation between American International and Greystone Housing

Considering the 90-day investment horizon American International Group is expected to generate 0.62 times more return on investment than Greystone Housing. However, American International Group is 1.6 times less risky than Greystone Housing. It trades about 0.01 of its potential returns per unit of risk. Greystone Housing Impact is currently generating about -0.12 per unit of risk. If you would invest  7,278  in American International Group on September 12, 2024 and sell it today you would earn a total of  22.00  from holding American International Group or generate 0.3% return on investment over 90 days.

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

American International Group  vs.  Greystone Housing Impact

American International

Risk-Adjusted Performance

0 of 100

Weak

Over the last 90 days American International Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable forward indicators, American International is not utilizing all of its potentials. The recent stock price disturbance, may contribute to mid-run losses for the stockholders.

Greystone Housing Impact

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with American International and Greystone Housing

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

The idea behind American International Group and Greystone Housing Impact 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.