Correlation Between AMREP and Dianthus Therapeutics

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

By analyzing existing cross correlation between AMREP and Dianthus Therapeutics, you can compare the effects of market volatilities on AMREP and Dianthus Therapeutics 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 Dianthus Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of AMREP and Dianthus Therapeutics.

Diversification Opportunities for AMREP and Dianthus Therapeutics

-0.74

Correlation Coefficient

AMREP  Dianthus Therapeutics

Pay attention - limited upside

The 3 months correlation between AMREP and Dianthus is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding AMREP and Dianthus Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dianthus Therapeutics 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 Dianthus Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dianthus Therapeutics has no effect on the direction of AMREP i.e., AMREP and Dianthus Therapeutics go up and down completely randomly.

Pair Corralation between AMREP and Dianthus Therapeutics

Considering the 90-day investment horizon AMREP is expected to generate 1.0 times more return on investment than Dianthus Therapeutics. However, AMREP is 1.0 times more volatile than Dianthus Therapeutics. It trades about 0.03 of its potential returns per unit of risk. Dianthus Therapeutics is currently generating about -0.02 per unit of risk. If you would invest  3,067  in AMREP on September 21, 2024 and sell it today you would earn a total of  124.00  from holding AMREP or generate 4.04% return on investment over 90 days.

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

AMREP  vs.  Dianthus Therapeutics

AMREP

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in AMREP are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Even with relatively fragile basic indicators, AMREP may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Dianthus Therapeutics

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Dianthus Therapeutics has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong basic indicators, Dianthus Therapeutics is not utilizing all of its potentials. The current stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with AMREP and Dianthus Therapeutics

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

The idea behind AMREP and Dianthus Therapeutics 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.