Correlation Between Amazon and YOMA STRATEGIC
Can any of the company-specific risk be diversified away by investing in both Amazon and YOMA STRATEGIC 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 YOMA STRATEGIC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Amazon Inc and YOMA STRATEGIC HLDG, you can compare the effects of market volatilities on Amazon and YOMA STRATEGIC 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 YOMA STRATEGIC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amazon and YOMA STRATEGIC.
Diversification Opportunities for Amazon and YOMA STRATEGIC
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Amazon and YOMA is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Amazon Inc and YOMA STRATEGIC HLDG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on YOMA STRATEGIC HLDG 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 YOMA STRATEGIC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of YOMA STRATEGIC HLDG has no effect on the direction of Amazon i.e., Amazon and YOMA STRATEGIC go up and down completely randomly.
Pair Corralation between Amazon and YOMA STRATEGIC
Assuming the 90 days trading horizon Amazon Inc is expected to generate 0.32 times more return on investment than YOMA STRATEGIC. However, Amazon Inc is 3.11 times less risky than YOMA STRATEGIC. It trades about 0.11 of its potential returns per unit of risk. YOMA STRATEGIC HLDG is currently generating about -0.02 per unit of risk. If you would invest 17,504 in Amazon Inc on September 19, 2024 and sell it today you would earn a total of 4,546 from holding Amazon Inc or generate 25.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.22% |
| Values | Daily Returns |
Amazon Inc vs. YOMA STRATEGIC HLDG
Performance |
| Timeline |
| Amazon Inc |
| YOMA STRATEGIC HLDG |
Amazon and YOMA STRATEGIC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Amazon and YOMA STRATEGIC
The main advantage of trading using opposite Amazon and YOMA STRATEGIC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amazon position performs unexpectedly, YOMA STRATEGIC 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 YOMA STRATEGIC will offset losses from the drop in YOMA STRATEGIC's long position.| Amazon vs. ATOSS SOFTWARE | Amazon vs. SHIN ETSU CHEMICAL | Amazon vs. CPU SOFTWAREHOUSE | Amazon vs. PSI Software AG |
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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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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