Correlation Between Amazon CDR and Total Energy
Can any of the company-specific risk be diversified away by investing in both Amazon CDR and Total 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 Total 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 Total Energy Services, you can compare the effects of market volatilities on Amazon CDR and Total 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 Total Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amazon CDR and Total Energy.
Diversification Opportunities for Amazon CDR and Total Energy
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Amazon and Total is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Amazon CDR and Total Energy Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Total Energy Services 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 Total Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Total Energy Services has no effect on the direction of Amazon CDR i.e., Amazon CDR and Total Energy go up and down completely randomly.
Pair Corralation between Amazon CDR and Total Energy
Assuming the 90 days trading horizon Amazon CDR is expected to generate 1.73 times less return on investment than Total Energy. In addition to that, Amazon CDR is 1.41 times more volatile than Total Energy Services. It trades about 0.23 of its total potential returns per unit of risk. Total Energy Services is currently generating about 0.57 per unit of volatility. If you would invest 962.00 in Total Energy Services on September 1, 2024 and sell it today you would earn a total of 206.00 from holding Total Energy Services or generate 21.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Amazon CDR vs. Total Energy Services
Performance |
| Timeline |
| Amazon CDR |
| Total Energy Services |
Amazon CDR and Total Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Amazon CDR and Total Energy
The main advantage of trading using opposite Amazon CDR and Total Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amazon CDR position performs unexpectedly, Total 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 Total Energy will offset losses from the drop in Total Energy's long position.| Amazon CDR vs. iShares Canadian HYBrid | Amazon CDR vs. Altagas Cum Red | Amazon CDR vs. European Residential Real | Amazon CDR vs. iShares Fundamental Hedged |
| Total Energy vs. Trican Well Service | Total Energy vs. Calfrac Well Services | Total Energy vs. CES Energy Solutions |
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.
Other Complementary Tools
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation |