Correlation Between Amazon CDR and Whitecap Resources
Can any of the company-specific risk be diversified away by investing in both Amazon CDR and Whitecap Resources 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 Whitecap Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Amazon CDR and Whitecap Resources, you can compare the effects of market volatilities on Amazon CDR and Whitecap Resources 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 Whitecap Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amazon CDR and Whitecap Resources.
Diversification Opportunities for Amazon CDR and Whitecap Resources
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Amazon and Whitecap is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Amazon CDR and Whitecap Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Whitecap Resources 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 Whitecap Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Whitecap Resources has no effect on the direction of Amazon CDR i.e., Amazon CDR and Whitecap Resources go up and down completely randomly.
Pair Corralation between Amazon CDR and Whitecap Resources
Assuming the 90 days trading horizon Amazon CDR is expected to generate 1.13 times more return on investment than Whitecap Resources. However, Amazon CDR is 1.13 times more volatile than Whitecap Resources. It trades about 0.11 of its potential returns per unit of risk. Whitecap Resources is currently generating about 0.02 per unit of risk. If you would invest 1,157 in Amazon CDR on November 9, 2024 and sell it today you would earn a total of 1,678 from holding Amazon CDR or generate 145.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Amazon CDR vs. Whitecap Resources
Performance |
| Timeline |
| Amazon CDR |
| Whitecap Resources |
Amazon CDR and Whitecap Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Amazon CDR and Whitecap Resources
The main advantage of trading using opposite Amazon CDR and Whitecap Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amazon CDR position performs unexpectedly, Whitecap Resources 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 Whitecap Resources will offset losses from the drop in Whitecap Resources' long position.| Amazon CDR vs. T2 Metals Corp | Amazon CDR vs. Network Media Group | Amazon CDR vs. Mako Mining Corp | Amazon CDR vs. Dream Industrial Real |
| Whitecap Resources vs. ARC Resources | Whitecap Resources vs. Tourmaline Oil Corp | Whitecap Resources vs. MEG Energy Corp | Whitecap Resources vs. Baytex Energy 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 Commodity Directory module to find actively traded commodities issued by global exchanges.
Other Complementary Tools
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities |