Correlation Between Lead Real and Alset Ehome

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

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

Diversification Opportunities for Lead Real and Alset Ehome

0.24

Correlation Coefficient

Lead Real  Alset Ehome

Modest diversification

The 3 months correlation between Lead and Alset is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Lead Real Estate and Alset Ehome International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alset Ehome International and Lead Real 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 Lead Real Estate are associated (or correlated) with Alset Ehome. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alset Ehome International has no effect on the direction of Lead Real i.e., Lead Real and Alset Ehome go up and down completely randomly.

Pair Corralation between Lead Real and Alset Ehome

Considering the 90-day investment horizon Lead Real Estate is expected to under-perform the Alset Ehome. But the stock apears to be less risky and, when comparing its historical volatility, Lead Real Estate is 1.95 times less risky than Alset Ehome. The stock trades about -0.11 of its potential returns per unit of risk. The Alset Ehome International is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  92.00  in Alset Ehome International on December 26, 2024 and sell it today you would earn a total of  4.00  from holding Alset Ehome International or generate 4.35% return on investment over 90 days.

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

Lead Real Estate  vs.  Alset Ehome International

Lead Real Estate

Risk-Adjusted Performance

Very Weak

Over the last 90 days Lead Real Estate 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 basic indicators remain rather sound which may send shares a bit higher in April 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Alset Ehome International

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Alset Ehome International are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite fairly weak technical and fundamental indicators, Alset Ehome demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Lead Real and Alset Ehome

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

The idea behind Lead Real Estate and Alset Ehome International 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.