Correlation Between Amazon CDR and Wesdome Gold
Can any of the company-specific risk be diversified away by investing in both Amazon CDR and Wesdome 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 Wesdome 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 Wesdome Gold Mines, you can compare the effects of market volatilities on Amazon CDR and Wesdome 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 Wesdome Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amazon CDR and Wesdome Gold.
Diversification Opportunities for Amazon CDR and Wesdome Gold
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Amazon and Wesdome is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Amazon CDR and Wesdome Gold Mines in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wesdome 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 Wesdome Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wesdome Gold Mines has no effect on the direction of Amazon CDR i.e., Amazon CDR and Wesdome Gold go up and down completely randomly.
Pair Corralation between Amazon CDR and Wesdome Gold
Assuming the 90 days trading horizon Amazon CDR is expected to generate 0.87 times more return on investment than Wesdome Gold. However, Amazon CDR is 1.15 times less risky than Wesdome Gold. It trades about 0.2 of its potential returns per unit of risk. Wesdome Gold Mines is currently generating about -0.04 per unit of risk. If you would invest 2,249 in Amazon CDR on August 29, 2024 and sell it today you would earn a total of 228.00 from holding Amazon CDR or generate 10.14% 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. Wesdome Gold Mines
Performance |
| Timeline |
| Amazon CDR |
| Wesdome Gold Mines |
Amazon CDR and Wesdome Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Amazon CDR and Wesdome Gold
The main advantage of trading using opposite Amazon CDR and Wesdome Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amazon CDR position performs unexpectedly, Wesdome 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 Wesdome Gold will offset losses from the drop in Wesdome Gold's long position.| Amazon CDR vs. NVIDIA CDR | Amazon CDR vs. Apple Inc CDR | Amazon CDR vs. Microsoft Corp CDR | Amazon CDR vs. Alphabet Inc CDR |
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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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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