Correlation Between AMREP and Lucas GC

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

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

Diversification Opportunities for AMREP and Lucas GC

0.1

Correlation Coefficient

AMREP  Lucas GC

Average diversification

The 3 months correlation between AMREP and Lucas is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding AMREP and Lucas GC Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lucas GC Limited 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 Lucas GC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lucas GC Limited has no effect on the direction of AMREP i.e., AMREP and Lucas GC go up and down completely randomly.

Pair Corralation between AMREP and Lucas GC

Considering the 90-day investment horizon AMREP is expected to under-perform the Lucas GC. But the stock apears to be less risky and, when comparing its historical volatility, AMREP is 2.02 times less risky than Lucas GC. The stock trades about -0.19 of its potential returns per unit of risk. The Lucas GC Limited is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest  58.00  in Lucas GC Limited on December 27, 2024 and sell it today you would lose (8.00) from holding Lucas GC Limited or give up 13.79% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	98.36%
Values	Daily Returns

AMREP  vs.  Lucas GC Limited

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.

Lucas GC Limited

Risk-Adjusted Performance

Weak

Over the last 90 days Lucas GC Limited has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent fundamental indicators, Lucas GC is not utilizing all of its potentials. The newest stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with AMREP and Lucas GC

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

The idea behind AMREP and Lucas GC Limited 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.