Correlation Between Amazon CDR and Cineplex
Can any of the company-specific risk be diversified away by investing in both Amazon CDR and Cineplex 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 Cineplex into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Amazon CDR and Cineplex, you can compare the effects of market volatilities on Amazon CDR and Cineplex 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 Cineplex. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amazon CDR and Cineplex.
Diversification Opportunities for Amazon CDR and Cineplex
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Amazon and Cineplex is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Amazon CDR and Cineplex in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cineplex 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 Cineplex. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cineplex has no effect on the direction of Amazon CDR i.e., Amazon CDR and Cineplex go up and down completely randomly.
Pair Corralation between Amazon CDR and Cineplex
Assuming the 90 days trading horizon Amazon CDR is expected to generate 0.91 times more return on investment than Cineplex. However, Amazon CDR is 1.1 times less risky than Cineplex. It trades about 0.09 of its potential returns per unit of risk. Cineplex is currently generating about 0.04 per unit of risk. If you would invest 1,168 in Amazon CDR on September 3, 2024 and sell it today you would earn a total of 1,309 from holding Amazon CDR or generate 112.07% 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. Cineplex
Performance |
| Timeline |
| Amazon CDR |
| Cineplex |
Amazon CDR and Cineplex Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Amazon CDR and Cineplex
The main advantage of trading using opposite Amazon CDR and Cineplex positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amazon CDR position performs unexpectedly, Cineplex 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 Cineplex will offset losses from the drop in Cineplex's long position.| Amazon CDR vs. CI Financial Corp | Amazon CDR vs. Canlan Ice Sports | Amazon CDR vs. Everyday People Financial | Amazon CDR vs. Brookfield Office Properties |
| Cineplex vs. Air Canada | Cineplex vs. BlackBerry | Cineplex vs. Suncor Energy | Cineplex vs. Drone Delivery Canada |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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