Correlation Between Amazon and Binero Group
Can any of the company-specific risk be diversified away by investing in both Amazon and Binero Group 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 and Binero Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Amazon Inc and Binero Group AB, you can compare the effects of market volatilities on Amazon and Binero 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 Binero Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amazon and Binero Group.
Diversification Opportunities for Amazon and Binero Group
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Amazon and Binero is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Amazon Inc and Binero Group AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Binero Group AB 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 Binero Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Binero Group AB has no effect on the direction of Amazon i.e., Amazon and Binero Group go up and down completely randomly.
Pair Corralation between Amazon and Binero Group
Given the investment horizon of 90 days Amazon Inc is expected to generate 0.33 times more return on investment than Binero Group. However, Amazon Inc is 3.07 times less risky than Binero Group. It trades about 0.09 of its potential returns per unit of risk. Binero Group AB is currently generating about 0.01 per unit of risk. If you would invest 9,249 in Amazon Inc on September 3, 2024 and sell it today you would earn a total of 11,540 from holding Amazon Inc or generate 124.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.4% |
| Values | Daily Returns |
Amazon Inc vs. Binero Group AB
Performance |
| Timeline |
| Amazon Inc |
| Binero Group AB |
Amazon and Binero Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Amazon and Binero Group
The main advantage of trading using opposite Amazon and Binero Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amazon position performs unexpectedly, Binero 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 Binero Group will offset losses from the drop in Binero Group's long position.The idea behind Amazon Inc and Binero Group AB 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.| Binero Group vs. Generic Sweden publ | Binero Group vs. Divio Technologies AB | Binero Group vs. Diadrom Holding AB | Binero Group vs. FlexQube AB |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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