Correlation Between Amazon CDR and Centerra Gold
Can any of the company-specific risk be diversified away by investing in both Amazon CDR and Centerra 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 Centerra 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 Centerra Gold, you can compare the effects of market volatilities on Amazon CDR and Centerra 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 Centerra Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amazon CDR and Centerra Gold.
Diversification Opportunities for Amazon CDR and Centerra Gold
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Amazon and Centerra is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Amazon CDR and Centerra Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Centerra Gold 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 Centerra Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Centerra Gold has no effect on the direction of Amazon CDR i.e., Amazon CDR and Centerra Gold go up and down completely randomly.
Pair Corralation between Amazon CDR and Centerra Gold
Assuming the 90 days trading horizon Amazon CDR is expected to generate 0.75 times more return on investment than Centerra Gold. However, Amazon CDR is 1.34 times less risky than Centerra Gold. It trades about 0.09 of its potential returns per unit of risk. Centerra Gold is currently generating about 0.03 per unit of risk. If you would invest 1,088 in Amazon CDR on August 28, 2024 and sell it today you would earn a total of 1,313 from holding Amazon CDR or generate 120.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Amazon CDR vs. Centerra Gold
Performance |
| Timeline |
| Amazon CDR |
| Centerra Gold |
Amazon CDR and Centerra Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Amazon CDR and Centerra Gold
The main advantage of trading using opposite Amazon CDR and Centerra Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amazon CDR position performs unexpectedly, Centerra 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 Centerra Gold will offset losses from the drop in Centerra Gold's long position.| Amazon CDR vs. NVIDIA CDR | Amazon CDR vs. Apple Inc CDR | Amazon CDR vs. Microsoft Corp CDR | Amazon CDR vs. Alphabet Inc CDR |
| Centerra Gold vs. Alamos Gold | Centerra Gold vs. NovaGold Resources | Centerra Gold vs. Eldorado Gold Corp | Centerra Gold vs. IAMGold |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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