Correlation Between Amazon and SUMMARECON AGUNG
Can any of the company-specific risk be diversified away by investing in both Amazon and SUMMARECON AGUNG 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 SUMMARECON AGUNG into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Amazon Inc and SUMMARECON AGUNG, you can compare the effects of market volatilities on Amazon and SUMMARECON AGUNG 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 SUMMARECON AGUNG. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amazon and SUMMARECON AGUNG.
Diversification Opportunities for Amazon and SUMMARECON AGUNG
-0.75 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Amazon and SUMMARECON is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding Amazon Inc and SUMMARECON AGUNG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SUMMARECON AGUNG 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 SUMMARECON AGUNG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SUMMARECON AGUNG has no effect on the direction of Amazon i.e., Amazon and SUMMARECON AGUNG go up and down completely randomly.
Pair Corralation between Amazon and SUMMARECON AGUNG
Assuming the 90 days trading horizon Amazon is expected to generate 2.92 times less return on investment than SUMMARECON AGUNG. But when comparing it to its historical volatility, Amazon Inc is 9.98 times less risky than SUMMARECON AGUNG. It trades about 0.2 of its potential returns per unit of risk. SUMMARECON AGUNG is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 2.40 in SUMMARECON AGUNG on September 14, 2024 and sell it today you would lose (0.20) from holding SUMMARECON AGUNG or give up 8.33% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Amazon Inc vs. SUMMARECON AGUNG
Performance |
| Timeline |
| Amazon Inc |
| SUMMARECON AGUNG |
Amazon and SUMMARECON AGUNG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Amazon and SUMMARECON AGUNG
The main advantage of trading using opposite Amazon and SUMMARECON AGUNG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amazon position performs unexpectedly, SUMMARECON AGUNG 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 SUMMARECON AGUNG will offset losses from the drop in SUMMARECON AGUNG's long position.| Amazon vs. Retail Estates NV | Amazon vs. Vastned Retail NV | Amazon vs. AEON STORES | Amazon vs. SPARTAN STORES |
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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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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