Correlation Between American Realty and Bayport International

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

By analyzing existing cross correlation between American Realty Investors and Bayport International Holdings, you can compare the effects of market volatilities on American Realty and Bayport International 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 American Realty with a short position of Bayport International. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Realty and Bayport International.

Diversification Opportunities for American Realty and Bayport International

0.17

Correlation Coefficient

American Realty  Bayport International

Average diversification

The 3 months correlation between American and Bayport is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding American Realty Investors and Bayport International Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bayport International and American Realty 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 American Realty Investors are associated (or correlated) with Bayport International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bayport International has no effect on the direction of American Realty i.e., American Realty and Bayport International go up and down completely randomly.

Pair Corralation between American Realty and Bayport International

Considering the 90-day investment horizon American Realty is expected to generate 795.51 times less return on investment than Bayport International. But when comparing it to its historical volatility, American Realty Investors is 77.96 times less risky than Bayport International. It trades about 0.02 of its potential returns per unit of risk. Bayport International Holdings is currently generating about 0.25 of returns per unit of risk over similar time horizon. If you would invest  0.01  in Bayport International Holdings on May 7, 2025 and sell it today you would earn a total of  0.00  from holding Bayport International Holdings or generate 0.0% return on investment over 90 days.

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

American Realty Investors  vs.  Bayport International Holdings

American Realty Investors

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in American Realty Investors are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent basic indicators, American Realty is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Bayport International

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Bayport International Holdings are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Bayport International reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with American Realty and Bayport International

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

The idea behind American Realty Investors and Bayport International Holdings 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 Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.