Correlation Between Amazon and ATRYS HEALTH
Can any of the company-specific risk be diversified away by investing in both Amazon and ATRYS HEALTH 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 Amazon and ATRYS HEALTH into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Amazon Inc and ATRYS HEALTH SA, you can compare the effects of market volatilities on Amazon and ATRYS HEALTH 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 Amazon with a short position of ATRYS HEALTH. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amazon and ATRYS HEALTH.
Diversification Opportunities for Amazon and ATRYS HEALTH
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Amazon and ATRYS is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Amazon Inc and ATRYS HEALTH SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ATRYS HEALTH SA and Amazon 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 Amazon Inc are associated (or correlated) with ATRYS HEALTH. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ATRYS HEALTH SA has no effect on the direction of Amazon i.e., Amazon and ATRYS HEALTH go up and down completely randomly.
Pair Corralation between Amazon and ATRYS HEALTH
Assuming the 90 days horizon Amazon Inc is expected to generate 0.8 times more return on investment than ATRYS HEALTH. However, Amazon Inc is 1.25 times less risky than ATRYS HEALTH. It trades about 0.09 of its potential returns per unit of risk. ATRYS HEALTH SA is currently generating about -0.05 per unit of risk. If you would invest 8,678 in Amazon Inc on August 24, 2024 and sell it today you would earn a total of 10,530 from holding Amazon Inc or generate 121.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
Amazon Inc vs. ATRYS HEALTH SA
Performance |
| Timeline |
| Amazon Inc |
| ATRYS HEALTH SA |
Amazon and ATRYS HEALTH Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Amazon and ATRYS HEALTH
The main advantage of trading using opposite Amazon and ATRYS HEALTH positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amazon position performs unexpectedly, ATRYS HEALTH 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 ATRYS HEALTH will offset losses from the drop in ATRYS HEALTH's long position.The idea behind Amazon Inc and ATRYS HEALTH SA 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.| ATRYS HEALTH vs. CSL Limited | ATRYS HEALTH vs. Superior Plus Corp | ATRYS HEALTH vs. NMI Holdings | ATRYS HEALTH vs. Origin Agritech |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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