Correlation Between COVIVIO HOTELS and Amazon
Can any of the company-specific risk be diversified away by investing in both COVIVIO HOTELS 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 COVIVIO HOTELS and Amazon into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between COVIVIO HOTELS INH and Amazon Inc, you can compare the effects of market volatilities on COVIVIO HOTELS 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 COVIVIO HOTELS with a short position of Amazon. Check out your portfolio center. Please also check ongoing floating volatility patterns of COVIVIO HOTELS and Amazon.
Diversification Opportunities for COVIVIO HOTELS and Amazon
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between COVIVIO and Amazon is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding COVIVIO HOTELS INH and Amazon Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amazon Inc and COVIVIO HOTELS 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 COVIVIO HOTELS INH 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 COVIVIO HOTELS i.e., COVIVIO HOTELS and Amazon go up and down completely randomly.
Pair Corralation between COVIVIO HOTELS and Amazon
Assuming the 90 days horizon COVIVIO HOTELS INH is expected to under-perform the Amazon. But the stock apears to be less risky and, when comparing its historical volatility, COVIVIO HOTELS INH is 3.65 times less risky than Amazon. The stock trades about -0.19 of its potential returns per unit of risk. The Amazon Inc is currently generating about 0.25 of returns per unit of risk over similar time horizon. If you would invest 18,000 in Amazon Inc on September 4, 2024 and sell it today you would earn a total of 2,085 from holding Amazon Inc or generate 11.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
COVIVIO HOTELS INH vs. Amazon Inc
Performance |
| Timeline |
| COVIVIO HOTELS INH |
| Amazon Inc |
COVIVIO HOTELS and Amazon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with COVIVIO HOTELS and Amazon
The main advantage of trading using opposite COVIVIO HOTELS and Amazon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if COVIVIO HOTELS 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.| COVIVIO HOTELS vs. Reliance Steel Aluminum | COVIVIO HOTELS vs. ETFS Coffee ETC | COVIVIO HOTELS vs. MOLSON RS BEVERAGE | COVIVIO HOTELS vs. COFCO Joycome Foods |
| Amazon vs. SWISS WATER DECAFFCOFFEE | Amazon vs. FEMALE HEALTH | Amazon vs. NH HOTEL GROUP | Amazon vs. COVIVIO HOTELS INH |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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