Correlation Between Amazon and Beijing Lanxum
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By analyzing existing cross correlation between Amazon Inc and Beijing Lanxum Tech, you can compare the effects of market volatilities on Amazon and Beijing Lanxum 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 with a short position of Beijing Lanxum. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amazon and Beijing Lanxum.
Diversification Opportunities for Amazon and Beijing Lanxum
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Amazon and Beijing is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Amazon Inc and Beijing Lanxum Tech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Beijing Lanxum Tech and Amazon 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 Inc are associated (or correlated) with Beijing Lanxum. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Beijing Lanxum Tech has no effect on the direction of Amazon i.e., Amazon and Beijing Lanxum go up and down completely randomly.
Pair Corralation between Amazon and Beijing Lanxum
Given the investment horizon of 90 days Amazon Inc is expected to generate 0.22 times more return on investment than Beijing Lanxum. However, Amazon Inc is 4.59 times less risky than Beijing Lanxum. It trades about 0.19 of its potential returns per unit of risk. Beijing Lanxum Tech is currently generating about 0.01 per unit of risk. If you would invest 19,578 in Amazon Inc on September 4, 2024 and sell it today you would earn a total of 1,493 from holding Amazon Inc or generate 7.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Amazon Inc vs. Beijing Lanxum Tech
Performance |
| Timeline |
| Amazon Inc |
| Beijing Lanxum Tech |
Amazon and Beijing Lanxum Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Amazon and Beijing Lanxum
The main advantage of trading using opposite Amazon and Beijing Lanxum positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amazon position performs unexpectedly, Beijing Lanxum 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 Beijing Lanxum will offset losses from the drop in Beijing Lanxum's long position.The idea behind Amazon Inc and Beijing Lanxum Tech pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Beijing Lanxum vs. Ciwen Media Co | Beijing Lanxum vs. Lander Sports Development | Beijing Lanxum vs. JiShi Media Co | Beijing Lanxum vs. Dalian Zeus Entertainment |
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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