Correlation Between Amazon CDR and Ceres Global
Can any of the company-specific risk be diversified away by investing in both Amazon CDR and Ceres Global 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 Ceres Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Amazon CDR and Ceres Global Ag, you can compare the effects of market volatilities on Amazon CDR and Ceres Global 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 Ceres Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amazon CDR and Ceres Global.
Diversification Opportunities for Amazon CDR and Ceres Global
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Amazon and Ceres is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Amazon CDR and Ceres Global Ag in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ceres Global Ag 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 Ceres Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ceres Global Ag has no effect on the direction of Amazon CDR i.e., Amazon CDR and Ceres Global go up and down completely randomly.
Pair Corralation between Amazon CDR and Ceres Global
Assuming the 90 days trading horizon Amazon CDR is expected to generate 1.08 times more return on investment than Ceres Global. However, Amazon CDR is 1.08 times more volatile than Ceres Global Ag. It trades about 0.15 of its potential returns per unit of risk. Ceres Global Ag is currently generating about -0.18 per unit of risk. If you would invest 2,299 in Amazon CDR on August 31, 2024 and sell it today you would earn a total of 171.00 from holding Amazon CDR or generate 7.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Amazon CDR vs. Ceres Global Ag
Performance |
| Timeline |
| Amazon CDR |
| Ceres Global Ag |
Amazon CDR and Ceres Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Amazon CDR and Ceres Global
The main advantage of trading using opposite Amazon CDR and Ceres Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amazon CDR position performs unexpectedly, Ceres Global 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 Ceres Global will offset losses from the drop in Ceres Global's long position.| Amazon CDR vs. Berkshire Hathaway CDR | Amazon CDR vs. JPMorgan Chase Co | Amazon CDR vs. Bank of America | Amazon CDR vs. Alphabet Inc CDR |
| Ceres Global vs. Maple Leaf Foods | Ceres Global vs. Saputo Inc | Ceres Global vs. Forstrong Global Income | Ceres Global vs. iShares Canadian HYBrid |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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