Correlation Between Amazon and DIH Holding
Can any of the company-specific risk be diversified away by investing in both Amazon and DIH Holding 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 DIH Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Amazon Inc and DIH Holding US,, you can compare the effects of market volatilities on Amazon and DIH Holding 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 DIH Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amazon and DIH Holding.
Diversification Opportunities for Amazon and DIH Holding
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between Amazon and DIH is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Amazon Inc and DIH Holding US, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DIH Holding US, 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 DIH Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DIH Holding US, has no effect on the direction of Amazon i.e., Amazon and DIH Holding go up and down completely randomly.
Pair Corralation between Amazon and DIH Holding
Given the investment horizon of 90 days Amazon is expected to generate 12.56 times less return on investment than DIH Holding. But when comparing it to its historical volatility, Amazon Inc is 15.32 times less risky than DIH Holding. It trades about 0.22 of its potential returns per unit of risk. DIH Holding US, is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 3.00 in DIH Holding US, on September 12, 2024 and sell it today you would earn a total of 1.89 from holding DIH Holding US, or generate 63.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Amazon Inc vs. DIH Holding US,
Performance |
| Timeline |
| Amazon Inc |
| DIH Holding US, |
Amazon and DIH Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Amazon and DIH Holding
The main advantage of trading using opposite Amazon and DIH Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amazon position performs unexpectedly, DIH Holding 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 DIH Holding will offset losses from the drop in DIH Holding's long position.The idea behind Amazon Inc and DIH Holding US, 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.| DIH Holding vs. Harmony Gold Mining | DIH Holding vs. Getty Copper | DIH Holding vs. Hooker Furniture | DIH Holding vs. Eastman Kodak Co |
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 CEOs Directory module to screen CEOs from public companies around the world.
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