Correlation Between Amazon CDR and Lycos Energy
Can any of the company-specific risk be diversified away by investing in both Amazon CDR and Lycos Energy 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 Lycos Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Amazon CDR and Lycos Energy, you can compare the effects of market volatilities on Amazon CDR and Lycos Energy 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 Lycos Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amazon CDR and Lycos Energy.
Diversification Opportunities for Amazon CDR and Lycos Energy
-0.74 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Amazon and Lycos is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding Amazon CDR and Lycos Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lycos Energy 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 Lycos Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lycos Energy has no effect on the direction of Amazon CDR i.e., Amazon CDR and Lycos Energy go up and down completely randomly.
Pair Corralation between Amazon CDR and Lycos Energy
Assuming the 90 days trading horizon Amazon CDR is expected to generate 0.45 times more return on investment than Lycos Energy. However, Amazon CDR is 2.22 times less risky than Lycos Energy. It trades about 0.2 of its potential returns per unit of risk. Lycos Energy is currently generating about -0.09 per unit of risk. If you would invest 2,705 in Amazon CDR on November 7, 2024 and sell it today you would earn a total of 171.00 from holding Amazon CDR or generate 6.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Amazon CDR vs. Lycos Energy
Performance |
| Timeline |
| Amazon CDR |
| Lycos Energy |
Amazon CDR and Lycos Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Amazon CDR and Lycos Energy
The main advantage of trading using opposite Amazon CDR and Lycos Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amazon CDR position performs unexpectedly, Lycos Energy 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 Lycos Energy will offset losses from the drop in Lycos Energy's long position.| Amazon CDR vs. Toronto Dominion Bank | Amazon CDR vs. Mako Mining Corp | Amazon CDR vs. Royal Road Minerals | Amazon CDR vs. Gamehost |
| Lycos Energy vs. Metalero Mining Corp | Lycos Energy vs. Magna Mining | Lycos Energy vs. NeXGold Mining Corp | Lycos Energy vs. XXIX Metal 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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