Correlation Between Amazon CDR and Accord Financial
Can any of the company-specific risk be diversified away by investing in both Amazon CDR and Accord Financial 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 CDR and Accord Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Amazon CDR and Accord Financial Corp, you can compare the effects of market volatilities on Amazon CDR and Accord Financial 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 CDR with a short position of Accord Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amazon CDR and Accord Financial.
Diversification Opportunities for Amazon CDR and Accord Financial
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Amazon and Accord is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Amazon CDR and Accord Financial Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Accord Financial Corp and Amazon CDR 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 CDR are associated (or correlated) with Accord Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Accord Financial Corp has no effect on the direction of Amazon CDR i.e., Amazon CDR and Accord Financial go up and down completely randomly.
Pair Corralation between Amazon CDR and Accord Financial
Assuming the 90 days trading horizon Amazon CDR is expected to generate 1.78 times more return on investment than Accord Financial. However, Amazon CDR is 1.78 times more volatile than Accord Financial Corp. It trades about 0.12 of its potential returns per unit of risk. Accord Financial Corp is currently generating about -0.15 per unit of risk. If you would invest 2,224 in Amazon CDR on August 25, 2024 and sell it today you would earn a total of 127.00 from holding Amazon CDR or generate 5.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Amazon CDR vs. Accord Financial Corp
Performance |
| Timeline |
| Amazon CDR |
| Accord Financial Corp |
Amazon CDR and Accord Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Amazon CDR and Accord Financial
The main advantage of trading using opposite Amazon CDR and Accord Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amazon CDR position performs unexpectedly, Accord Financial 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 Accord Financial will offset losses from the drop in Accord Financial's long position.| Amazon CDR vs. Ramp Metals | Amazon CDR vs. Gatos Silver | Amazon CDR vs. Sparx Technology | Amazon CDR vs. Ocumetics Technology Corp |
| Accord Financial vs. Algoma Central | Accord Financial vs. Chesswood Group Limited | Accord Financial vs. Clairvest Group | Accord Financial vs. Clarke 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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