Correlation Between Amazon CDR and Entourage Health
Can any of the company-specific risk be diversified away by investing in both Amazon CDR and Entourage Health 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 Entourage Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Amazon CDR and Entourage Health Corp, you can compare the effects of market volatilities on Amazon CDR and Entourage Health 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 Entourage Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amazon CDR and Entourage Health.
Diversification Opportunities for Amazon CDR and Entourage Health
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Amazon and Entourage is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Amazon CDR and Entourage Health Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Entourage Health Corp 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 Entourage Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Entourage Health Corp has no effect on the direction of Amazon CDR i.e., Amazon CDR and Entourage Health go up and down completely randomly.
Pair Corralation between Amazon CDR and Entourage Health
Assuming the 90 days trading horizon Amazon CDR is expected to generate 31.57 times less return on investment than Entourage Health. But when comparing it to its historical volatility, Amazon CDR is 22.46 times less risky than Entourage Health. It trades about 0.15 of its potential returns per unit of risk. Entourage Health Corp is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest 1.00 in Entourage Health Corp on August 30, 2024 and sell it today you would earn a total of 0.00 from holding Entourage Health Corp or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Amazon CDR vs. Entourage Health Corp
Performance |
| Timeline |
| Amazon CDR |
| Entourage Health Corp |
Amazon CDR and Entourage Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Amazon CDR and Entourage Health
The main advantage of trading using opposite Amazon CDR and Entourage Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amazon CDR position performs unexpectedly, Entourage Health 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 Entourage Health will offset losses from the drop in Entourage Health's long position.| Amazon CDR vs. Maple Leaf Foods | Amazon CDR vs. Solid Impact Investments | Amazon CDR vs. Leons Furniture Limited | Amazon CDR vs. Algonquin Power Utilities |
| Entourage Health vs. Auxly Cannabis Group | Entourage Health vs. Lifeist Wellness | Entourage Health vs. Medipharm Labs Corp |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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