Correlation Between Amazon and PT Hexindo
Can any of the company-specific risk be diversified away by investing in both Amazon and PT Hexindo 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 PT Hexindo into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Amazon Inc and PT Hexindo Adiperkasa, you can compare the effects of market volatilities on Amazon and PT Hexindo 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 PT Hexindo. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amazon and PT Hexindo.
Diversification Opportunities for Amazon and PT Hexindo
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between Amazon and HX1A is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Amazon Inc and PT Hexindo Adiperkasa in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PT Hexindo Adiperkasa 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 PT Hexindo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PT Hexindo Adiperkasa has no effect on the direction of Amazon i.e., Amazon and PT Hexindo go up and down completely randomly.
Pair Corralation between Amazon and PT Hexindo
Assuming the 90 days horizon Amazon Inc is expected to under-perform the PT Hexindo. But the stock apears to be less risky and, when comparing its historical volatility, Amazon Inc is 1.61 times less risky than PT Hexindo. The stock trades about -0.34 of its potential returns per unit of risk. The PT Hexindo Adiperkasa is currently generating about -0.13 of returns per unit of risk over similar time horizon. If you would invest 27.00 in PT Hexindo Adiperkasa on November 29, 2024 and sell it today you would lose (2.00) from holding PT Hexindo Adiperkasa or give up 7.41% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Amazon Inc vs. PT Hexindo Adiperkasa
Performance |
| Timeline |
| Amazon Inc |
| PT Hexindo Adiperkasa |
Amazon and PT Hexindo Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Amazon and PT Hexindo
The main advantage of trading using opposite Amazon and PT Hexindo positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amazon position performs unexpectedly, PT Hexindo 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 PT Hexindo will offset losses from the drop in PT Hexindo's long position.| Amazon vs. Xenia Hotels Resorts | Amazon vs. SmarTone Telecommunications Holdings | Amazon vs. MHP Hotel AG | Amazon vs. Ribbon Communications |
| PT Hexindo vs. Thai Beverage Public | PT Hexindo vs. China Resources Beer | PT Hexindo vs. NIGHTINGALE HEALTH EO | PT Hexindo vs. THAI BEVERAGE |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
Other Complementary Tools
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities |