Correlation Between Amazon CDR and Electrovaya
Can any of the company-specific risk be diversified away by investing in both Amazon CDR and Electrovaya 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 Electrovaya into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Amazon CDR and Electrovaya, you can compare the effects of market volatilities on Amazon CDR and Electrovaya 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 Electrovaya. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amazon CDR and Electrovaya.
Diversification Opportunities for Amazon CDR and Electrovaya
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Amazon and Electrovaya is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Amazon CDR and Electrovaya in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Electrovaya 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 Electrovaya. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Electrovaya has no effect on the direction of Amazon CDR i.e., Amazon CDR and Electrovaya go up and down completely randomly.
Pair Corralation between Amazon CDR and Electrovaya
Assuming the 90 days trading horizon Amazon CDR is expected to generate 1.85 times less return on investment than Electrovaya. But when comparing it to its historical volatility, Amazon CDR is 2.66 times less risky than Electrovaya. It trades about 0.17 of its potential returns per unit of risk. Electrovaya is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 286.00 in Electrovaya on November 1, 2024 and sell it today you would earn a total of 88.00 from holding Electrovaya or generate 30.77% 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. Electrovaya
Performance |
| Timeline |
| Amazon CDR |
| Electrovaya |
Amazon CDR and Electrovaya Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Amazon CDR and Electrovaya
The main advantage of trading using opposite Amazon CDR and Electrovaya positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amazon CDR position performs unexpectedly, Electrovaya 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 Electrovaya will offset losses from the drop in Electrovaya's long position.| Amazon CDR vs. Ramp Metals | Amazon CDR vs. Calian Technologies | Amazon CDR vs. Stampede Drilling | Amazon CDR vs. Doman Building Materials |
| Electrovaya vs. WELL Health Technologies | Electrovaya vs. Contagious Gaming | Electrovaya vs. Maple Leaf Foods | Electrovaya vs. Jamieson Wellness |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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