Correlation Between Amazon CDR and Contagious Gaming
Can any of the company-specific risk be diversified away by investing in both Amazon CDR and Contagious Gaming 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 Contagious Gaming into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Amazon CDR and Contagious Gaming, you can compare the effects of market volatilities on Amazon CDR and Contagious Gaming 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 Contagious Gaming. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amazon CDR and Contagious Gaming.
Diversification Opportunities for Amazon CDR and Contagious Gaming
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Amazon and Contagious is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Amazon CDR and Contagious Gaming in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Contagious Gaming 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 Contagious Gaming. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Contagious Gaming has no effect on the direction of Amazon CDR i.e., Amazon CDR and Contagious Gaming go up and down completely randomly.
Pair Corralation between Amazon CDR and Contagious Gaming
Assuming the 90 days trading horizon Amazon CDR is expected to generate 1.2 times less return on investment than Contagious Gaming. But when comparing it to its historical volatility, Amazon CDR is 3.95 times less risky than Contagious Gaming. It trades about 0.1 of its potential returns per unit of risk. Contagious Gaming is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 1.00 in Contagious Gaming on September 6, 2024 and sell it today you would earn a total of 0.00 from holding Contagious Gaming or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Amazon CDR vs. Contagious Gaming
Performance |
| Timeline |
| Amazon CDR |
| Contagious Gaming |
Amazon CDR and Contagious Gaming Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Amazon CDR and Contagious Gaming
The main advantage of trading using opposite Amazon CDR and Contagious Gaming positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amazon CDR position performs unexpectedly, Contagious Gaming 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 Contagious Gaming will offset losses from the drop in Contagious Gaming's long position.| Amazon CDR vs. Quorum Information Technologies | Amazon CDR vs. Chemtrade Logistics Income | Amazon CDR vs. Aya Gold Silver | Amazon CDR vs. Orbit Garant Drilling |
| Contagious Gaming vs. Marimaca Copper Corp | Contagious Gaming vs. Primaris Retail RE | Contagious Gaming vs. Constellation Software | Contagious Gaming vs. Nicola Mining |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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