Correlation Between Amazon and Gmo Resources
Can any of the company-specific risk be diversified away by investing in both Amazon and Gmo Resources 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 Gmo Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Amazon Inc and Gmo Resources Series, you can compare the effects of market volatilities on Amazon and Gmo Resources 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 Gmo Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amazon and Gmo Resources.
Diversification Opportunities for Amazon and Gmo Resources
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Amazon and Gmo is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Amazon Inc and Gmo Resources Series in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gmo Resources Series 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 Gmo Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gmo Resources Series has no effect on the direction of Amazon i.e., Amazon and Gmo Resources go up and down completely randomly.
Pair Corralation between Amazon and Gmo Resources
If you would invest 18,700 in Amazon Inc on September 12, 2024 and sell it today you would earn a total of 4,318 from holding Amazon Inc or generate 23.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
Amazon Inc vs. Gmo Resources Series
Performance |
| Timeline |
| Amazon Inc |
| Gmo Resources Series |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Amazon and Gmo Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Amazon and Gmo Resources
The main advantage of trading using opposite Amazon and Gmo Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amazon position performs unexpectedly, Gmo Resources 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 Gmo Resources will offset losses from the drop in Gmo Resources' long position.The idea behind Amazon Inc and Gmo Resources Series 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.| Gmo Resources vs. Absolute Convertible Arbitrage | Gmo Resources vs. Allianzgi Convertible Income | Gmo Resources vs. Putnam Convertible Incm Gwth | Gmo Resources vs. Advent Claymore Convertible |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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