Correlation Between Amazon and Precigen
Can any of the company-specific risk be diversified away by investing in both Amazon and Precigen 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 Precigen into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Amazon Inc and Precigen, you can compare the effects of market volatilities on Amazon and Precigen 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 Precigen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amazon and Precigen.
Diversification Opportunities for Amazon and Precigen
Very good diversification
The 3 months correlation between Amazon and Precigen is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Amazon Inc and Precigen in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Precigen 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 Precigen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Precigen has no effect on the direction of Amazon i.e., Amazon and Precigen go up and down completely randomly.
Pair Corralation between Amazon and Precigen
Assuming the 90 days horizon Amazon Inc is expected to generate 0.46 times more return on investment than Precigen. However, Amazon Inc is 2.16 times less risky than Precigen. It trades about 0.23 of its potential returns per unit of risk. Precigen is currently generating about 0.1 per unit of risk. If you would invest 17,822 in Amazon Inc on August 30, 2024 and sell it today you would earn a total of 1,876 from holding Amazon Inc or generate 10.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Amazon Inc vs. Precigen
Performance |
| Timeline |
| Amazon Inc |
| Precigen |
Amazon and Precigen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Amazon and Precigen
The main advantage of trading using opposite Amazon and Precigen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amazon position performs unexpectedly, Precigen 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 Precigen will offset losses from the drop in Precigen's long position.The idea behind Amazon Inc and Precigen 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.| Precigen vs. Playtech plc | Precigen vs. KOOL2PLAY SA ZY | Precigen vs. PLAYSTUDIOS A DL 0001 | Precigen vs. COLUMBIA SPORTSWEAR |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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