Correlation Between Superior Plus and Amazon
Can any of the company-specific risk be diversified away by investing in both Superior Plus and Amazon 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 Superior Plus and Amazon into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Superior Plus Corp and Amazon Inc, you can compare the effects of market volatilities on Superior Plus and Amazon 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 Superior Plus with a short position of Amazon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Superior Plus and Amazon.
Diversification Opportunities for Superior Plus and Amazon
-0.84 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Superior and Amazon is -0.84. Overlapping area represents the amount of risk that can be diversified away by holding Superior Plus Corp and Amazon Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amazon Inc and Superior Plus 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 Superior Plus Corp are associated (or correlated) with Amazon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amazon Inc has no effect on the direction of Superior Plus i.e., Superior Plus and Amazon go up and down completely randomly.
Pair Corralation between Superior Plus and Amazon
Assuming the 90 days horizon Superior Plus is expected to generate 3.25 times less return on investment than Amazon. In addition to that, Superior Plus is 2.36 times more volatile than Amazon Inc. It trades about 0.03 of its total potential returns per unit of risk. Amazon Inc is currently generating about 0.22 per unit of volatility. If you would invest 17,536 in Amazon Inc on August 30, 2024 and sell it today you would earn a total of 1,890 from holding Amazon Inc or generate 10.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Superior Plus Corp vs. Amazon Inc
Performance |
| Timeline |
| Superior Plus Corp |
| Amazon Inc |
Superior Plus and Amazon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Superior Plus and Amazon
The main advantage of trading using opposite Superior Plus and Amazon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Superior Plus position performs unexpectedly, Amazon 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 Amazon will offset losses from the drop in Amazon's long position.| Superior Plus vs. HYDROFARM HLD GRP | Superior Plus vs. Titan Machinery | Superior Plus vs. GOODYEAR T RUBBER | Superior Plus vs. Sterling Construction |
| Amazon vs. Apple Inc | Amazon vs. Apple Inc | Amazon vs. Superior Plus Corp | Amazon vs. SIVERS SEMICONDUCTORS AB |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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