Correlation Between Amazon and Obducat AB
Can any of the company-specific risk be diversified away by investing in both Amazon and Obducat AB 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 Obducat AB into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Amazon Inc and Obducat AB, you can compare the effects of market volatilities on Amazon and Obducat AB 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 Obducat AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amazon and Obducat AB.
Diversification Opportunities for Amazon and Obducat AB
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Amazon and Obducat is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Amazon Inc and Obducat AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Obducat AB 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 Obducat AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Obducat AB has no effect on the direction of Amazon i.e., Amazon and Obducat AB go up and down completely randomly.
Pair Corralation between Amazon and Obducat AB
Assuming the 90 days trading horizon Amazon Inc is expected to generate 0.33 times more return on investment than Obducat AB. However, Amazon Inc is 3.0 times less risky than Obducat AB. It trades about 0.21 of its potential returns per unit of risk. Obducat AB is currently generating about -0.21 per unit of risk. If you would invest 16,652 in Amazon Inc on August 30, 2024 and sell it today you would earn a total of 2,774 from holding Amazon Inc or generate 16.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Amazon Inc vs. Obducat AB
Performance |
| Timeline |
| Amazon Inc |
| Obducat AB |
Amazon and Obducat AB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Amazon and Obducat AB
The main advantage of trading using opposite Amazon and Obducat AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amazon position performs unexpectedly, Obducat AB 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 Obducat AB will offset losses from the drop in Obducat AB's long position.| Amazon vs. Apple Inc | Amazon vs. Apple Inc | Amazon vs. Superior Plus Corp | Amazon vs. SIVERS SEMICONDUCTORS AB |
| Obducat AB vs. Mizuho Financial Group | Obducat AB vs. JSC Halyk bank | Obducat AB vs. National Bank Holdings | Obducat AB vs. Daido Steel Co |
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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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