Correlation Between Amazon and SunHydrogen
Can any of the company-specific risk be diversified away by investing in both Amazon and SunHydrogen 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 SunHydrogen into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Amazon Inc and SunHydrogen, you can compare the effects of market volatilities on Amazon and SunHydrogen 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 SunHydrogen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amazon and SunHydrogen.
Diversification Opportunities for Amazon and SunHydrogen
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Amazon and SunHydrogen is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Amazon Inc and SunHydrogen in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SunHydrogen 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 SunHydrogen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SunHydrogen has no effect on the direction of Amazon i.e., Amazon and SunHydrogen go up and down completely randomly.
Pair Corralation between Amazon and SunHydrogen
Given the investment horizon of 90 days Amazon Inc is expected to generate 0.47 times more return on investment than SunHydrogen. However, Amazon Inc is 2.13 times less risky than SunHydrogen. It trades about 0.24 of its potential returns per unit of risk. SunHydrogen is currently generating about -0.15 per unit of risk. If you would invest 18,640 in Amazon Inc on September 1, 2024 and sell it today you would earn a total of 2,149 from holding Amazon Inc or generate 11.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Amazon Inc vs. SunHydrogen
Performance |
| Timeline |
| Amazon Inc |
| SunHydrogen |
Amazon and SunHydrogen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Amazon and SunHydrogen
The main advantage of trading using opposite Amazon and SunHydrogen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amazon position performs unexpectedly, SunHydrogen 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 SunHydrogen will offset losses from the drop in SunHydrogen's long position.The idea behind Amazon Inc and SunHydrogen 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.| SunHydrogen vs. Enerkon Solar International | SunHydrogen vs. Ascent Solar Technologies, | SunHydrogen vs. Solar Integrated Roofing | SunHydrogen vs. mPhase Technologies |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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