Correlation Between Azaria Rental and Home Capital

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

By analyzing existing cross correlation between Azaria Rental SOCIMI and Home Capital Rentals, you can compare the effects of market volatilities on Azaria Rental and Home Capital 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 Azaria Rental with a short position of Home Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Azaria Rental and Home Capital.

Diversification Opportunities for Azaria Rental and Home Capital

0.22

Correlation Coefficient

Azaria Rental  Home Capital

Modest diversification

The 3 months correlation between Azaria and Home is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Azaria Rental SOCIMI and Home Capital Rentals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Home Capital Rentals and Azaria Rental 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 Azaria Rental SOCIMI are associated (or correlated) with Home Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Home Capital Rentals has no effect on the direction of Azaria Rental i.e., Azaria Rental and Home Capital go up and down completely randomly.

Pair Corralation between Azaria Rental and Home Capital

If you would invest  660.00  in Home Capital Rentals on December 29, 2024 and sell it today you would earn a total of  0.00  from holding Home Capital Rentals or generate 0.0% return on investment over 90 days.

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

Azaria Rental SOCIMI  vs.  Home Capital Rentals

Azaria Rental SOCIMI

Risk-Adjusted Performance

Very Weak

Over the last 90 days Azaria Rental SOCIMI has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound fundamental indicators, Azaria Rental is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Home Capital Rentals

Risk-Adjusted Performance

Very Weak

Over the last 90 days Home Capital Rentals has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound fundamental indicators, Home Capital is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Azaria Rental and Home Capital

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

The idea behind Azaria Rental SOCIMI and Home Capital Rentals 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.