Correlation Between AMREP and Acacia Research

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

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

Diversification Opportunities for AMREP and Acacia Research

0.82

Correlation Coefficient

AMREP  Acacia Research

Very poor diversification

The 3 months correlation between AMREP and Acacia is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding AMREP and Acacia Research in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Acacia Research and AMREP 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 AMREP are associated (or correlated) with Acacia Research. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Acacia Research has no effect on the direction of AMREP i.e., AMREP and Acacia Research go up and down completely randomly.

Pair Corralation between AMREP and Acacia Research

Considering the 90-day investment horizon AMREP is expected to under-perform the Acacia Research. In addition to that, AMREP is 1.48 times more volatile than Acacia Research. It trades about -0.2 of its total potential returns per unit of risk. Acacia Research is currently generating about -0.17 per unit of volatility. If you would invest  433.00  in Acacia Research on December 28, 2024 and sell it today you would lose (97.00) from holding Acacia Research or give up 22.4% of portfolio value over 90 days.

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

AMREP  vs.  Acacia Research

AMREP

Risk-Adjusted Performance

Very Weak

Over the last 90 days AMREP has generated negative risk-adjusted returns adding no value to investors with long positions. Even with weak performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in April 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Acacia Research

Risk-Adjusted Performance

Very Weak

Over the last 90 days Acacia Research has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with AMREP and Acacia Research

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

The idea behind AMREP and Acacia Research 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.