Correlation Between Amazon CDR and Chorus Aviation
Can any of the company-specific risk be diversified away by investing in both Amazon CDR and Chorus Aviation 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 Chorus Aviation into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Amazon CDR and Chorus Aviation, you can compare the effects of market volatilities on Amazon CDR and Chorus Aviation 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 Chorus Aviation. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amazon CDR and Chorus Aviation.
Diversification Opportunities for Amazon CDR and Chorus Aviation
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Amazon and Chorus is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Amazon CDR and Chorus Aviation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chorus Aviation 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 Chorus Aviation. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chorus Aviation has no effect on the direction of Amazon CDR i.e., Amazon CDR and Chorus Aviation go up and down completely randomly.
Pair Corralation between Amazon CDR and Chorus Aviation
Assuming the 90 days trading horizon Amazon CDR is expected to generate 0.88 times more return on investment than Chorus Aviation. However, Amazon CDR is 1.14 times less risky than Chorus Aviation. It trades about 0.19 of its potential returns per unit of risk. Chorus Aviation is currently generating about 0.16 per unit of risk. If you would invest 2,249 in Amazon CDR on August 29, 2024 and sell it today you would earn a total of 228.00 from holding Amazon CDR or generate 10.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Amazon CDR vs. Chorus Aviation
Performance |
| Timeline |
| Amazon CDR |
| Chorus Aviation |
Amazon CDR and Chorus Aviation Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Amazon CDR and Chorus Aviation
The main advantage of trading using opposite Amazon CDR and Chorus Aviation positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amazon CDR position performs unexpectedly, Chorus Aviation 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 Chorus Aviation will offset losses from the drop in Chorus Aviation's long position.| Amazon CDR vs. Eros Resources Corp | Amazon CDR vs. Apple Inc CDR | Amazon CDR vs. European Residential Real | Amazon CDR vs. Canadian Utilities Ltd |
| Chorus Aviation vs. Cargojet | Chorus Aviation vs. Exchange Income | Chorus Aviation vs. Cineplex | Chorus Aviation vs. Transat AT |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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