Correlation Between Amazon CDR and Aris Gold
Can any of the company-specific risk be diversified away by investing in both Amazon CDR and Aris Gold 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 Aris Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Amazon CDR and Aris Gold Corp, you can compare the effects of market volatilities on Amazon CDR and Aris Gold 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 Aris Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amazon CDR and Aris Gold.
Diversification Opportunities for Amazon CDR and Aris Gold
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Amazon and Aris is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Amazon CDR and Aris Gold Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aris Gold 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 Aris Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aris Gold Corp has no effect on the direction of Amazon CDR i.e., Amazon CDR and Aris Gold go up and down completely randomly.
Pair Corralation between Amazon CDR and Aris Gold
Assuming the 90 days trading horizon Amazon CDR is expected to generate 0.65 times more return on investment than Aris Gold. However, Amazon CDR is 1.53 times less risky than Aris Gold. It trades about 0.09 of its potential returns per unit of risk. Aris Gold Corp is currently generating about 0.05 per unit of risk. If you would invest 1,112 in Amazon CDR on September 2, 2024 and sell it today you would earn a total of 1,365 from holding Amazon CDR or generate 122.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Amazon CDR vs. Aris Gold Corp
Performance |
| Timeline |
| Amazon CDR |
| Aris Gold Corp |
Amazon CDR and Aris Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Amazon CDR and Aris Gold
The main advantage of trading using opposite Amazon CDR and Aris Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amazon CDR position performs unexpectedly, Aris Gold 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 Aris Gold will offset losses from the drop in Aris Gold's long position.| Amazon CDR vs. iShares Canadian HYBrid | Amazon CDR vs. Altagas Cum Red | Amazon CDR vs. European Residential Real | Amazon CDR vs. iShares Fundamental Hedged |
| Aris Gold vs. Calibre Mining Corp | Aris Gold vs. K92 Mining | Aris Gold vs. Equinox Gold Corp | Aris Gold vs. New Found Gold |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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