Correlation Between Amazon and Huatai Securities
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By analyzing existing cross correlation between Amazon Inc and Huatai Securities Co, you can compare the effects of market volatilities on Amazon and Huatai Securities 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 Huatai Securities. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amazon and Huatai Securities.
Diversification Opportunities for Amazon and Huatai Securities
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Amazon and Huatai is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Amazon Inc and Huatai Securities Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Huatai Securities 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 Huatai Securities. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Huatai Securities has no effect on the direction of Amazon i.e., Amazon and Huatai Securities go up and down completely randomly.
Pair Corralation between Amazon and Huatai Securities
Given the investment horizon of 90 days Amazon Inc is expected to generate 1.14 times more return on investment than Huatai Securities. However, Amazon is 1.14 times more volatile than Huatai Securities Co. It trades about 0.22 of its potential returns per unit of risk. Huatai Securities Co is currently generating about -0.17 per unit of risk. If you would invest 20,684 in Amazon Inc on September 12, 2024 and sell it today you would earn a total of 1,820 from holding Amazon Inc or generate 8.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Amazon Inc vs. Huatai Securities Co
Performance |
| Timeline |
| Amazon Inc |
| Huatai Securities |
Amazon and Huatai Securities Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Amazon and Huatai Securities
The main advantage of trading using opposite Amazon and Huatai Securities positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amazon position performs unexpectedly, Huatai Securities 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 Huatai Securities will offset losses from the drop in Huatai Securities' long position.The idea behind Amazon Inc and Huatai Securities 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.| Huatai Securities vs. Shanghai Yanpu Metal | Huatai Securities vs. Huaxia Fund Management | Huatai Securities vs. Shandong Mining Machinery | Huatai Securities vs. Dalian Thermal Power |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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