Correlation Between AmeraMex International and Rev

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

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

Diversification Opportunities for AmeraMex International and Rev

-0.53

Correlation Coefficient

AmeraMex International  Rev

Excellent diversification

The 3 months correlation between AmeraMex and Rev is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding AmeraMex International and Rev Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rev Group and AmeraMex 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 AmeraMex International are associated (or correlated) with Rev. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rev Group has no effect on the direction of AmeraMex International i.e., AmeraMex International and Rev go up and down completely randomly.

Pair Corralation between AmeraMex International and Rev

Given the investment horizon of 90 days AmeraMex International is expected to generate 3.89 times more return on investment than Rev. However, AmeraMex International is 3.89 times more volatile than Rev Group. It trades about 0.03 of its potential returns per unit of risk. Rev Group is currently generating about 0.1 per unit of risk. If you would invest  44.00  in AmeraMex International on September 13, 2024 and sell it today you would lose (22.00) from holding AmeraMex International or give up 50.0% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	99.8%
Values	Daily Returns

AmeraMex International  vs.  Rev Group

AmeraMex International

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days AmeraMex International has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fragile performance in the last few months, the Stock's primary indicators remain fairly strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Rev Group

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Rev Group are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly unsteady basic indicators, Rev reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with AmeraMex International and Rev

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

The idea behind AmeraMex International and Rev Group 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.