Correlation Between NFT and AMREP

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

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

Diversification Opportunities for NFT and AMREP

0.07

Correlation Coefficient

NFT  AMREP

Significant diversification

The 3 months correlation between NFT and AMREP is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding NFT Limited and AMREP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AMREP and NFT 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 NFT Limited are associated (or correlated) with AMREP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AMREP has no effect on the direction of NFT i.e., NFT and AMREP go up and down completely randomly.

Pair Corralation between NFT and AMREP

Allowing for the 90-day total investment horizon NFT is expected to generate 11.03 times less return on investment than AMREP. In addition to that, NFT is 2.83 times more volatile than AMREP. It trades about 0.0 of its total potential returns per unit of risk. AMREP is currently generating about 0.09 per unit of volatility. If you would invest  1,538  in AMREP on September 1, 2024 and sell it today you would earn a total of  2,066  from holding AMREP or generate 134.33% return on investment over 90 days.

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

NFT Limited  vs.  AMREP

NFT Limited

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in NFT Limited are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite fairly weak forward indicators, NFT demonstrated solid returns over the last few months and may actually be approaching a breakup point.

AMREP

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in AMREP are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, AMREP reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with NFT and AMREP

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

The idea behind NFT Limited and AMREP 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.