Correlation Between Amazon CDR and ISign Media
Can any of the company-specific risk be diversified away by investing in both Amazon CDR and ISign Media 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 ISign Media into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Amazon CDR and iSign Media Solutions, you can compare the effects of market volatilities on Amazon CDR and ISign Media 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 ISign Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amazon CDR and ISign Media.
Diversification Opportunities for Amazon CDR and ISign Media
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Amazon and ISign is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Amazon CDR and iSign Media Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iSign Media Solutions 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 ISign Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iSign Media Solutions has no effect on the direction of Amazon CDR i.e., Amazon CDR and ISign Media go up and down completely randomly.
Pair Corralation between Amazon CDR and ISign Media
Assuming the 90 days trading horizon Amazon CDR is expected to generate 18.11 times less return on investment than ISign Media. But when comparing it to its historical volatility, Amazon CDR is 29.71 times less risky than ISign Media. It trades about 0.09 of its potential returns per unit of risk. iSign Media Solutions is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 1.00 in iSign Media Solutions on September 12, 2024 and sell it today you would earn a total of 1,418 from holding iSign Media Solutions or generate 141800.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Amazon CDR vs. iSign Media Solutions
Performance |
| Timeline |
| Amazon CDR |
| iSign Media Solutions |
Amazon CDR and ISign Media Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Amazon CDR and ISign Media
The main advantage of trading using opposite Amazon CDR and ISign Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amazon CDR position performs unexpectedly, ISign Media 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 ISign Media will offset losses from the drop in ISign Media's long position.| Amazon CDR vs. Data Communications Management | Amazon CDR vs. Marimaca Copper Corp | Amazon CDR vs. Rogers Communications | Amazon CDR vs. Maple Leaf Foods |
| ISign Media vs. Apple Inc CDR | ISign Media vs. NVIDIA CDR | ISign Media vs. Microsoft Corp CDR | ISign Media vs. Amazon CDR |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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