Correlation Between Amazon and Hualan Group
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By analyzing existing cross correlation between Amazon Inc and Hualan Group Co, you can compare the effects of market volatilities on Amazon and Hualan Group 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 Hualan Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amazon and Hualan Group.
Diversification Opportunities for Amazon and Hualan Group
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Amazon and Hualan is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Amazon Inc and Hualan Group Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hualan Group 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 Hualan Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hualan Group has no effect on the direction of Amazon i.e., Amazon and Hualan Group go up and down completely randomly.
Pair Corralation between Amazon and Hualan Group
Given the investment horizon of 90 days Amazon Inc is expected to generate 0.47 times more return on investment than Hualan Group. However, Amazon Inc is 2.11 times less risky than Hualan Group. It trades about 0.1 of its potential returns per unit of risk. Hualan Group Co is currently generating about 0.02 per unit of risk. If you would invest 9,158 in Amazon Inc on September 4, 2024 and sell it today you would earn a total of 11,913 from holding Amazon Inc or generate 130.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 96.16% |
| Values | Daily Returns |
Amazon Inc vs. Hualan Group Co
Performance |
| Timeline |
| Amazon Inc |
| Hualan Group |
Amazon and Hualan Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Amazon and Hualan Group
The main advantage of trading using opposite Amazon and Hualan Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amazon position performs unexpectedly, Hualan Group 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 Hualan Group will offset losses from the drop in Hualan Group's long position.The idea behind Amazon Inc and Hualan Group Co 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.| Hualan Group vs. Hainan Mining Co | Hualan Group vs. Uroica Mining Safety | Hualan Group vs. Fujian Oriental Silver | Hualan Group vs. Guangdong Silvere Sci |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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