Correlation Between Amazon and CureVac NV
Can any of the company-specific risk be diversified away by investing in both Amazon and CureVac NV 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 CureVac NV into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Amazon Inc and CureVac NV, you can compare the effects of market volatilities on Amazon and CureVac NV 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 CureVac NV. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amazon and CureVac NV.
Diversification Opportunities for Amazon and CureVac NV
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Amazon and CureVac is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Amazon Inc and CureVac NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CureVac NV 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 CureVac NV. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CureVac NV has no effect on the direction of Amazon i.e., Amazon and CureVac NV go up and down completely randomly.
Pair Corralation between Amazon and CureVac NV
Assuming the 90 days trading horizon Amazon Inc is expected to generate 0.6 times more return on investment than CureVac NV. However, Amazon Inc is 1.66 times less risky than CureVac NV. It trades about 0.22 of its potential returns per unit of risk. CureVac NV is currently generating about -0.01 per unit of risk. If you would invest 17,510 in Amazon Inc on August 29, 2024 and sell it today you would earn a total of 2,168 from holding Amazon Inc or generate 12.38% 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. CureVac NV
Performance |
| Timeline |
| Amazon Inc |
| CureVac NV |
Amazon and CureVac NV Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Amazon and CureVac NV
The main advantage of trading using opposite Amazon and CureVac NV positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amazon position performs unexpectedly, CureVac NV 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 CureVac NV will offset losses from the drop in CureVac NV's long position.| Amazon vs. ALBIS LEASING AG | Amazon vs. Silicon Motion Technology | Amazon vs. TERADATA | Amazon vs. Air Lease |
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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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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