Correlation Between Amazon CDR and Westhaven Ventures
Can any of the company-specific risk be diversified away by investing in both Amazon CDR and Westhaven Ventures 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 Westhaven Ventures into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Amazon CDR and Westhaven Ventures, you can compare the effects of market volatilities on Amazon CDR and Westhaven Ventures 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 Westhaven Ventures. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amazon CDR and Westhaven Ventures.
Diversification Opportunities for Amazon CDR and Westhaven Ventures
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Amazon and Westhaven is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Amazon CDR and Westhaven Ventures in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Westhaven Ventures 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 Westhaven Ventures. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Westhaven Ventures has no effect on the direction of Amazon CDR i.e., Amazon CDR and Westhaven Ventures go up and down completely randomly.
Pair Corralation between Amazon CDR and Westhaven Ventures
Assuming the 90 days trading horizon Amazon CDR is expected to generate 0.33 times more return on investment than Westhaven Ventures. However, Amazon CDR is 3.0 times less risky than Westhaven Ventures. It trades about 0.11 of its potential returns per unit of risk. Westhaven Ventures is currently generating about -0.01 per unit of risk. If you would invest 1,128 in Amazon CDR on November 1, 2024 and sell it today you would earn a total of 1,662 from holding Amazon CDR or generate 147.34% 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. Westhaven Ventures
Performance |
| Timeline |
| Amazon CDR |
| Westhaven Ventures |
Amazon CDR and Westhaven Ventures Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Amazon CDR and Westhaven Ventures
The main advantage of trading using opposite Amazon CDR and Westhaven Ventures positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amazon CDR position performs unexpectedly, Westhaven Ventures 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 Westhaven Ventures will offset losses from the drop in Westhaven Ventures' long position.| Amazon CDR vs. Constellation Software | Amazon CDR vs. Mako Mining Corp | Amazon CDR vs. Osisko Metals | Amazon CDR vs. Sparx Technology |
| Westhaven Ventures vs. Kore Mining | Westhaven Ventures vs. Endurance Gold Corp | Westhaven Ventures vs. Galway Metals | Westhaven Ventures vs. Grande Portage Resources |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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