Correlation Between Amazon CDR and Canadian Utilities
Can any of the company-specific risk be diversified away by investing in both Amazon CDR and Canadian Utilities 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 Canadian Utilities into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Amazon CDR and Canadian Utilities Ltd, you can compare the effects of market volatilities on Amazon CDR and Canadian Utilities 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 Canadian Utilities. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amazon CDR and Canadian Utilities.
Diversification Opportunities for Amazon CDR and Canadian Utilities
-0.67 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Amazon and Canadian is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Amazon CDR and Canadian Utilities Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Canadian Utilities 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 Canadian Utilities. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Canadian Utilities has no effect on the direction of Amazon CDR i.e., Amazon CDR and Canadian Utilities go up and down completely randomly.
Pair Corralation between Amazon CDR and Canadian Utilities
Assuming the 90 days trading horizon Amazon CDR is expected to generate 1.94 times more return on investment than Canadian Utilities. However, Amazon CDR is 1.94 times more volatile than Canadian Utilities Ltd. It trades about 0.17 of its potential returns per unit of risk. Canadian Utilities Ltd is currently generating about -0.14 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 202.00 from holding Amazon CDR or generate 8.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Amazon CDR vs. Canadian Utilities Ltd
Performance |
| Timeline |
| Amazon CDR |
| Canadian Utilities |
Amazon CDR and Canadian Utilities Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Amazon CDR and Canadian Utilities
The main advantage of trading using opposite Amazon CDR and Canadian Utilities positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amazon CDR position performs unexpectedly, Canadian Utilities 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 Canadian Utilities will offset losses from the drop in Canadian Utilities' 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 |
| Canadian Utilities vs. Forstrong Global Income | Canadian Utilities vs. Terreno Resources Corp | Canadian Utilities vs. iShares Canadian HYBrid | Canadian Utilities vs. Brompton European Dividend |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
Other Complementary Tools
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal |