Correlation Between Amazon and Bellerophon Therapeutics
Can any of the company-specific risk be diversified away by investing in both Amazon and Bellerophon Therapeutics 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 Bellerophon Therapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Amazon Inc and Bellerophon Therapeutics, you can compare the effects of market volatilities on Amazon and Bellerophon Therapeutics 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 Bellerophon Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amazon and Bellerophon Therapeutics.
Diversification Opportunities for Amazon and Bellerophon Therapeutics
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Amazon and Bellerophon is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Amazon Inc and Bellerophon Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bellerophon Therapeutics 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 Bellerophon Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bellerophon Therapeutics has no effect on the direction of Amazon i.e., Amazon and Bellerophon Therapeutics go up and down completely randomly.
Pair Corralation between Amazon and Bellerophon Therapeutics
If you would invest 10,004 in Amazon Inc on December 5, 2024 and sell it today you would earn a total of 10,376 from holding Amazon Inc or generate 103.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
Amazon Inc vs. Bellerophon Therapeutics
Performance |
| Timeline |
| Amazon Inc |
| Bellerophon Therapeutics |
Risk-Adjusted Performance
Very Weak
Weak | Strong |
Amazon and Bellerophon Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Amazon and Bellerophon Therapeutics
The main advantage of trading using opposite Amazon and Bellerophon Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amazon position performs unexpectedly, Bellerophon Therapeutics 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 Bellerophon Therapeutics will offset losses from the drop in Bellerophon Therapeutics' long position.The idea behind Amazon Inc and Bellerophon Therapeutics 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.| Bellerophon Therapeutics vs. Bio Path Holdings | ||
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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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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