Correlation Between Amazon and FLYHT Aerospace
Can any of the company-specific risk be diversified away by investing in both Amazon and FLYHT Aerospace 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 FLYHT Aerospace into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Amazon Inc and FLYHT Aerospace Solutions, you can compare the effects of market volatilities on Amazon and FLYHT Aerospace 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 FLYHT Aerospace. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amazon and FLYHT Aerospace.
Diversification Opportunities for Amazon and FLYHT Aerospace
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Amazon and FLYHT is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Amazon Inc and FLYHT Aerospace Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FLYHT Aerospace Solutions 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 FLYHT Aerospace. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FLYHT Aerospace Solutions has no effect on the direction of Amazon i.e., Amazon and FLYHT Aerospace go up and down completely randomly.
Pair Corralation between Amazon and FLYHT Aerospace
Given the investment horizon of 90 days Amazon Inc is expected to generate 1.14 times more return on investment than FLYHT Aerospace. However, Amazon is 1.14 times more volatile than FLYHT Aerospace Solutions. It trades about 0.2 of its potential returns per unit of risk. FLYHT Aerospace Solutions is currently generating about 0.09 per unit of risk. If you would invest 19,578 in Amazon Inc on September 4, 2024 and sell it today you would earn a total of 1,493 from holding Amazon Inc or generate 7.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 90.91% |
| Values | Daily Returns |
Amazon Inc vs. FLYHT Aerospace Solutions
Performance |
| Timeline |
| Amazon Inc |
| FLYHT Aerospace Solutions |
Amazon and FLYHT Aerospace Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Amazon and FLYHT Aerospace
The main advantage of trading using opposite Amazon and FLYHT Aerospace positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amazon position performs unexpectedly, FLYHT Aerospace 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 FLYHT Aerospace will offset losses from the drop in FLYHT Aerospace's long position.The idea behind Amazon Inc and FLYHT Aerospace Solutions 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.| FLYHT Aerospace vs. Firan Technology Group | FLYHT Aerospace vs. AnalytixInsight | FLYHT Aerospace vs. Baylin Technologies | FLYHT Aerospace vs. Bewhere Holdings |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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