Correlation Between Amedeo Air and AstraZeneca PLC
Can any of the company-specific risk be diversified away by investing in both Amedeo Air and AstraZeneca PLC 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 Amedeo Air and AstraZeneca PLC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Amedeo Air Four and AstraZeneca PLC ADR, you can compare the effects of market volatilities on Amedeo Air and AstraZeneca PLC 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 Amedeo Air with a short position of AstraZeneca PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amedeo Air and AstraZeneca PLC.
Diversification Opportunities for Amedeo Air and AstraZeneca PLC
-0.77 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Amedeo and AstraZeneca is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding Amedeo Air Four and AstraZeneca PLC ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AstraZeneca PLC ADR and Amedeo Air 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 Amedeo Air Four are associated (or correlated) with AstraZeneca PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AstraZeneca PLC ADR has no effect on the direction of Amedeo Air i.e., Amedeo Air and AstraZeneca PLC go up and down completely randomly.
Pair Corralation between Amedeo Air and AstraZeneca PLC
Assuming the 90 days trading horizon Amedeo Air Four is expected to generate 0.26 times more return on investment than AstraZeneca PLC. However, Amedeo Air Four is 3.79 times less risky than AstraZeneca PLC. It trades about 0.48 of its potential returns per unit of risk. AstraZeneca PLC ADR is currently generating about -0.12 per unit of risk. If you would invest 5,000 in Amedeo Air Four on September 4, 2024 and sell it today you would earn a total of 340.00 from holding Amedeo Air Four or generate 6.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Amedeo Air Four vs. AstraZeneca PLC ADR
Performance |
| Timeline |
| Amedeo Air Four |
| AstraZeneca PLC ADR |
Amedeo Air and AstraZeneca PLC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Amedeo Air and AstraZeneca PLC
The main advantage of trading using opposite Amedeo Air and AstraZeneca PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amedeo Air position performs unexpectedly, AstraZeneca PLC 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 AstraZeneca PLC will offset losses from the drop in AstraZeneca PLC's long position.| Amedeo Air vs. Samsung Electronics Co | Amedeo Air vs. Samsung Electronics Co | Amedeo Air vs. Hyundai Motor | Amedeo Air vs. Toyota Motor Corp |
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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 Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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