Correlation Between Alaska Energy and Amazon CDR
Can any of the company-specific risk be diversified away by investing in both Alaska Energy and Amazon CDR 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 Alaska Energy and Amazon CDR into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alaska Energy Metals and Amazon CDR, you can compare the effects of market volatilities on Alaska Energy and Amazon CDR 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 Alaska Energy with a short position of Amazon CDR. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alaska Energy and Amazon CDR.
Diversification Opportunities for Alaska Energy and Amazon CDR
-0.69 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Alaska and Amazon is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Alaska Energy Metals and Amazon CDR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amazon CDR and Alaska Energy 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 Alaska Energy Metals are associated (or correlated) with Amazon CDR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amazon CDR has no effect on the direction of Alaska Energy i.e., Alaska Energy and Amazon CDR go up and down completely randomly.
Pair Corralation between Alaska Energy and Amazon CDR
Assuming the 90 days trading horizon Alaska Energy Metals is expected to under-perform the Amazon CDR. In addition to that, Alaska Energy is 2.17 times more volatile than Amazon CDR. It trades about -0.11 of its total potential returns per unit of risk. Amazon CDR is currently generating about 0.17 per unit of volatility. If you would invest 2,175 in Amazon CDR on September 3, 2024 and sell it today you would earn a total of 302.00 from holding Amazon CDR or generate 13.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Alaska Energy Metals vs. Amazon CDR
Performance |
| Timeline |
| Alaska Energy Metals |
| Amazon CDR |
Alaska Energy and Amazon CDR Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alaska Energy and Amazon CDR
The main advantage of trading using opposite Alaska Energy and Amazon CDR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alaska Energy position performs unexpectedly, Amazon CDR 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 CDR will offset losses from the drop in Amazon CDR's long position.| Alaska Energy vs. Dream Office Real | Alaska Energy vs. HPQ Silicon Resources | Alaska Energy vs. Bip Investment Corp | Alaska Energy vs. Richelieu Hardware |
| Amazon CDR vs. CI Financial Corp | Amazon CDR vs. Canlan Ice Sports | Amazon CDR vs. Everyday People Financial | Amazon CDR vs. Brookfield Office Properties |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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