Correlation Between Amazon CDR and Greenlane Renewables
Can any of the company-specific risk be diversified away by investing in both Amazon CDR and Greenlane Renewables 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 Greenlane Renewables into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Amazon CDR and Greenlane Renewables, you can compare the effects of market volatilities on Amazon CDR and Greenlane Renewables 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 Greenlane Renewables. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amazon CDR and Greenlane Renewables.
Diversification Opportunities for Amazon CDR and Greenlane Renewables
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Amazon and Greenlane is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Amazon CDR and Greenlane Renewables in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Greenlane Renewables 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 Greenlane Renewables. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Greenlane Renewables has no effect on the direction of Amazon CDR i.e., Amazon CDR and Greenlane Renewables go up and down completely randomly.
Pair Corralation between Amazon CDR and Greenlane Renewables
Assuming the 90 days trading horizon Amazon CDR is expected to generate 0.3 times more return on investment than Greenlane Renewables. However, Amazon CDR is 3.29 times less risky than Greenlane Renewables. It trades about 0.09 of its potential returns per unit of risk. Greenlane Renewables is currently generating about -0.01 per unit of risk. If you would invest 1,532 in Amazon CDR on October 12, 2024 and sell it today you would earn a total of 1,138 from holding Amazon CDR or generate 74.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.74% |
| Values | Daily Returns |
Amazon CDR vs. Greenlane Renewables
Performance |
| Timeline |
| Amazon CDR |
| Greenlane Renewables |
Amazon CDR and Greenlane Renewables Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Amazon CDR and Greenlane Renewables
The main advantage of trading using opposite Amazon CDR and Greenlane Renewables positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amazon CDR position performs unexpectedly, Greenlane Renewables 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 Greenlane Renewables will offset losses from the drop in Greenlane Renewables' long position.| Amazon CDR vs. Aya Gold Silver | Amazon CDR vs. Bank of Nova | Amazon CDR vs. Plaza Retail REIT | Amazon CDR vs. Gatos Silver |
| Greenlane Renewables vs. Solar Alliance Energy | Greenlane Renewables vs. Converge Technology Solutions | Greenlane Renewables vs. WELL Health Technologies |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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