Correlation Between Amazon and LEWAG HOLDING
Can any of the company-specific risk be diversified away by investing in both Amazon and LEWAG HOLDING 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 LEWAG HOLDING into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Amazon Inc and LEWAG HOLDING AG, you can compare the effects of market volatilities on Amazon and LEWAG HOLDING 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 LEWAG HOLDING. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amazon and LEWAG HOLDING.
Diversification Opportunities for Amazon and LEWAG HOLDING
-0.8 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Amazon and LEWAG is -0.8. Overlapping area represents the amount of risk that can be diversified away by holding Amazon Inc and LEWAG HOLDING AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LEWAG HOLDING AG 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 LEWAG HOLDING. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LEWAG HOLDING AG has no effect on the direction of Amazon i.e., Amazon and LEWAG HOLDING go up and down completely randomly.
Pair Corralation between Amazon and LEWAG HOLDING
Assuming the 90 days trading horizon Amazon Inc is expected to generate 0.79 times more return on investment than LEWAG HOLDING. However, Amazon Inc is 1.27 times less risky than LEWAG HOLDING. It trades about 0.16 of its potential returns per unit of risk. LEWAG HOLDING AG is currently generating about -0.03 per unit of risk. If you would invest 18,260 in Amazon Inc on September 2, 2024 and sell it today you would earn a total of 1,280 from holding Amazon Inc or generate 7.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Amazon Inc vs. LEWAG HOLDING AG
Performance |
| Timeline |
| Amazon Inc |
| LEWAG HOLDING AG |
Amazon and LEWAG HOLDING Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Amazon and LEWAG HOLDING
The main advantage of trading using opposite Amazon and LEWAG HOLDING positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amazon position performs unexpectedly, LEWAG HOLDING 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 LEWAG HOLDING will offset losses from the drop in LEWAG HOLDING's long position.| Amazon vs. Richardson Electronics | Amazon vs. Mobilezone Holding AG | Amazon vs. METHODE ELECTRONICS | Amazon vs. Arrow Electronics |
| LEWAG HOLDING vs. Cardinal Health | LEWAG HOLDING vs. Singapore Reinsurance | LEWAG HOLDING vs. YOOMA WELLNESS INC | LEWAG HOLDING vs. Direct Line Insurance |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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