Correlation Between Amazon and Liechtensteinische
Can any of the company-specific risk be diversified away by investing in both Amazon and Liechtensteinische 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 Liechtensteinische into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Amazon Inc and Liechtensteinische Landesbank Aktiengesellschaft, you can compare the effects of market volatilities on Amazon and Liechtensteinische 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 Liechtensteinische. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amazon and Liechtensteinische.
Diversification Opportunities for Amazon and Liechtensteinische
-0.67 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Amazon and Liechtensteinische is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Amazon Inc and Liechtensteinische Landesbank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Liechtensteinische 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 Liechtensteinische. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Liechtensteinische has no effect on the direction of Amazon i.e., Amazon and Liechtensteinische go up and down completely randomly.
Pair Corralation between Amazon and Liechtensteinische
Assuming the 90 days trading horizon Amazon Inc is expected to generate 1.09 times more return on investment than Liechtensteinische. However, Amazon is 1.09 times more volatile than Liechtensteinische Landesbank Aktiengesellschaft. It trades about 0.11 of its potential returns per unit of risk. Liechtensteinische Landesbank Aktiengesellschaft is currently generating about 0.04 per unit of risk. If you would invest 14,004 in Amazon Inc on September 14, 2024 and sell it today you would earn a total of 7,901 from holding Amazon Inc or generate 56.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Amazon Inc vs. Liechtensteinische Landesbank
Performance |
| Timeline |
| Amazon Inc |
| Liechtensteinische |
Amazon and Liechtensteinische Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Amazon and Liechtensteinische
The main advantage of trading using opposite Amazon and Liechtensteinische positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amazon position performs unexpectedly, Liechtensteinische 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 Liechtensteinische will offset losses from the drop in Liechtensteinische's long position.| Amazon vs. Scientific Games | Amazon vs. International Game Technology | Amazon vs. Jupiter Fund Management | Amazon vs. GAMESTOP |
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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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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