Correlation Between Amazon CDR and Volcanic Gold
Can any of the company-specific risk be diversified away by investing in both Amazon CDR and Volcanic Gold 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 Volcanic Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Amazon CDR and Volcanic Gold Mines, you can compare the effects of market volatilities on Amazon CDR and Volcanic Gold 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 Volcanic Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amazon CDR and Volcanic Gold.
Diversification Opportunities for Amazon CDR and Volcanic Gold
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Amazon and Volcanic is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Amazon CDR and Volcanic Gold Mines in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Volcanic Gold Mines 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 Volcanic Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Volcanic Gold Mines has no effect on the direction of Amazon CDR i.e., Amazon CDR and Volcanic Gold go up and down completely randomly.
Pair Corralation between Amazon CDR and Volcanic Gold
Assuming the 90 days trading horizon Amazon CDR is expected to generate 0.26 times more return on investment than Volcanic Gold. However, Amazon CDR is 3.8 times less risky than Volcanic Gold. It trades about 0.15 of its potential returns per unit of risk. Volcanic Gold Mines is currently generating about -0.05 per unit of risk. If you would invest 2,278 in Amazon CDR on August 30, 2024 and sell it today you would earn a total of 173.00 from holding Amazon CDR or generate 7.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Amazon CDR vs. Volcanic Gold Mines
Performance |
| Timeline |
| Amazon CDR |
| Volcanic Gold Mines |
Amazon CDR and Volcanic Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Amazon CDR and Volcanic Gold
The main advantage of trading using opposite Amazon CDR and Volcanic Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amazon CDR position performs unexpectedly, Volcanic Gold 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 Volcanic Gold will offset losses from the drop in Volcanic Gold's long position.| Amazon CDR vs. Maple Leaf Foods | Amazon CDR vs. Solid Impact Investments | Amazon CDR vs. Leons Furniture Limited | Amazon CDR vs. Algonquin Power Utilities |
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.
Other Complementary Tools
| Transaction History View history of all your transactions and understand their impact on performance | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance |