Correlation Between Amazon CDR and Thor Explorations
Can any of the company-specific risk be diversified away by investing in both Amazon CDR and Thor Explorations 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 Thor Explorations into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Amazon CDR and Thor Explorations, you can compare the effects of market volatilities on Amazon CDR and Thor Explorations 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 Thor Explorations. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amazon CDR and Thor Explorations.
Diversification Opportunities for Amazon CDR and Thor Explorations
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Amazon and Thor is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Amazon CDR and Thor Explorations in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thor Explorations 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 Thor Explorations. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thor Explorations has no effect on the direction of Amazon CDR i.e., Amazon CDR and Thor Explorations go up and down completely randomly.
Pair Corralation between Amazon CDR and Thor Explorations
Assuming the 90 days trading horizon Amazon CDR is expected to generate 1.04 times less return on investment than Thor Explorations. But when comparing it to its historical volatility, Amazon CDR is 2.06 times less risky than Thor Explorations. It trades about 0.08 of its potential returns per unit of risk. Thor Explorations is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 25.00 in Thor Explorations on August 25, 2024 and sell it today you would earn a total of 5.00 from holding Thor Explorations or generate 20.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Amazon CDR vs. Thor Explorations
Performance |
| Timeline |
| Amazon CDR |
| Thor Explorations |
Amazon CDR and Thor Explorations Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Amazon CDR and Thor Explorations
The main advantage of trading using opposite Amazon CDR and Thor Explorations positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amazon CDR position performs unexpectedly, Thor Explorations 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 Thor Explorations will offset losses from the drop in Thor Explorations' long position.| Amazon CDR vs. Ramp Metals | Amazon CDR vs. Gatos Silver | Amazon CDR vs. Sparx Technology | Amazon CDR vs. Ocumetics Technology Corp |
| Thor Explorations vs. First Majestic Silver | Thor Explorations vs. Ivanhoe Energy | Thor Explorations vs. Orezone Gold Corp | Thor Explorations vs. Faraday Copper 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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