Correlation Between Amazon and STOMO MITSUI
Can any of the company-specific risk be diversified away by investing in both Amazon and STOMO MITSUI 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 STOMO MITSUI into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Amazon Inc and STOMO MITSUI FINL, you can compare the effects of market volatilities on Amazon and STOMO MITSUI 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 STOMO MITSUI. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amazon and STOMO MITSUI.
Diversification Opportunities for Amazon and STOMO MITSUI
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Amazon and STOMO is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Amazon Inc and STOMO MITSUI FINL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on STOMO MITSUI FINL 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 STOMO MITSUI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of STOMO MITSUI FINL has no effect on the direction of Amazon i.e., Amazon and STOMO MITSUI go up and down completely randomly.
Pair Corralation between Amazon and STOMO MITSUI
Assuming the 90 days trading horizon Amazon Inc is expected to generate 0.67 times more return on investment than STOMO MITSUI. However, Amazon Inc is 1.5 times less risky than STOMO MITSUI. It trades about 0.53 of its potential returns per unit of risk. STOMO MITSUI FINL is currently generating about 0.09 per unit of risk. If you would invest 19,010 in Amazon Inc on September 19, 2024 and sell it today you would earn a total of 3,040 from holding Amazon Inc or generate 15.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Amazon Inc vs. STOMO MITSUI FINL
Performance |
| Timeline |
| Amazon Inc |
| STOMO MITSUI FINL |
Amazon and STOMO MITSUI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Amazon and STOMO MITSUI
The main advantage of trading using opposite Amazon and STOMO MITSUI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amazon position performs unexpectedly, STOMO MITSUI 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 STOMO MITSUI will offset losses from the drop in STOMO MITSUI's long position.| Amazon vs. ATOSS SOFTWARE | Amazon vs. SHIN ETSU CHEMICAL | Amazon vs. CPU SOFTWAREHOUSE | Amazon vs. PSI Software AG |
| STOMO MITSUI vs. Apple Inc | STOMO MITSUI vs. Apple Inc | STOMO MITSUI vs. Apple Inc | STOMO MITSUI vs. Apple Inc |
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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