Correlation Between Altisource Portfolio and Re Max

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

By analyzing existing cross correlation between Altisource Portfolio Solutions and Re Max Holding, you can compare the effects of market volatilities on Altisource Portfolio and Re Max 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 Altisource Portfolio with a short position of Re Max. Check out your portfolio center. Please also check ongoing floating volatility patterns of Altisource Portfolio and Re Max.

Diversification Opportunities for Altisource Portfolio and Re Max

-0.15

Correlation Coefficient

Altisource Portfolio  Re Max

Good diversification

The 3 months correlation between Altisource and RMAX is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Altisource Portfolio Solutions and Re Max Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Re Max Holding and Altisource Portfolio 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 Altisource Portfolio Solutions are associated (or correlated) with Re Max. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Re Max Holding has no effect on the direction of Altisource Portfolio i.e., Altisource Portfolio and Re Max go up and down completely randomly.

Pair Corralation between Altisource Portfolio and Re Max

Given the investment horizon of 90 days Altisource Portfolio Solutions is expected to generate 3.24 times more return on investment than Re Max. However, Altisource Portfolio is 3.24 times more volatile than Re Max Holding. It trades about 0.05 of its potential returns per unit of risk. Re Max Holding is currently generating about -0.1 per unit of risk. If you would invest  71.00  in Altisource Portfolio Solutions on December 29, 2024 and sell it today you would earn a total of  1.00  from holding Altisource Portfolio Solutions or generate 1.41% return on investment over 90 days.

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

Altisource Portfolio Solutions  vs.  Re Max Holding

Altisource Portfolio

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Altisource Portfolio Solutions are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unfluctuating basic indicators, Altisource Portfolio unveiled solid returns over the last few months and may actually be approaching a breakup point.

Re Max Holding

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Altisource Portfolio and Re Max

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

The idea behind Altisource Portfolio Solutions and Re Max Holding 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.