Correlation Between Amazon CDR and Dexterra
Can any of the company-specific risk be diversified away by investing in both Amazon CDR and Dexterra 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 Dexterra into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Amazon CDR and Dexterra Group, you can compare the effects of market volatilities on Amazon CDR and Dexterra 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 Dexterra. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amazon CDR and Dexterra.
Diversification Opportunities for Amazon CDR and Dexterra
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Amazon and Dexterra is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Amazon CDR and Dexterra Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dexterra Group 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 Dexterra. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dexterra Group has no effect on the direction of Amazon CDR i.e., Amazon CDR and Dexterra go up and down completely randomly.
Pair Corralation between Amazon CDR and Dexterra
Assuming the 90 days trading horizon Amazon CDR is expected to generate 1.16 times less return on investment than Dexterra. In addition to that, Amazon CDR is 1.22 times more volatile than Dexterra Group. It trades about 0.41 of its total potential returns per unit of risk. Dexterra Group is currently generating about 0.58 per unit of volatility. If you would invest 653.00 in Dexterra Group on September 18, 2024 and sell it today you would earn a total of 110.00 from holding Dexterra Group or generate 16.85% 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. Dexterra Group
Performance |
| Timeline |
| Amazon CDR |
| Dexterra Group |
Amazon CDR and Dexterra Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Amazon CDR and Dexterra
The main advantage of trading using opposite Amazon CDR and Dexterra positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amazon CDR position performs unexpectedly, Dexterra 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 Dexterra will offset losses from the drop in Dexterra's long position.| Amazon CDR vs. Highwood Asset Management | Amazon CDR vs. Bip Investment Corp | Amazon CDR vs. Westshore Terminals Investment | Amazon CDR vs. Information Services |
| Dexterra vs. Doman Building Materials | Dexterra vs. Topaz Energy Corp | Dexterra vs. Bird Construction | Dexterra vs. Alaris Equity Partners |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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