Correlation Between Amazon CDR and GoldMoney
Can any of the company-specific risk be diversified away by investing in both Amazon CDR and GoldMoney 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 GoldMoney into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Amazon CDR and GoldMoney, you can compare the effects of market volatilities on Amazon CDR and GoldMoney 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 GoldMoney. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amazon CDR and GoldMoney.
Diversification Opportunities for Amazon CDR and GoldMoney
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Amazon and GoldMoney is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Amazon CDR and GoldMoney in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GoldMoney 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 GoldMoney. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GoldMoney has no effect on the direction of Amazon CDR i.e., Amazon CDR and GoldMoney go up and down completely randomly.
Pair Corralation between Amazon CDR and GoldMoney
Assuming the 90 days trading horizon Amazon CDR is expected to generate 1.01 times more return on investment than GoldMoney. However, Amazon CDR is 1.01 times more volatile than GoldMoney. It trades about 0.16 of its potential returns per unit of risk. GoldMoney is currently generating about -0.36 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 192.00 from holding Amazon CDR or generate 8.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Amazon CDR vs. GoldMoney
Performance |
| Timeline |
| Amazon CDR |
| GoldMoney |
Amazon CDR and GoldMoney Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Amazon CDR and GoldMoney
The main advantage of trading using opposite Amazon CDR and GoldMoney positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amazon CDR position performs unexpectedly, GoldMoney 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 GoldMoney will offset losses from the drop in GoldMoney'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 |
| GoldMoney vs. Apple Inc CDR | GoldMoney vs. Berkshire Hathaway CDR | GoldMoney vs. Microsoft Corp CDR | GoldMoney vs. Alphabet Inc CDR |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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