Correlation Between Amazon and SFI INVESTIMENTOS
Can any of the company-specific risk be diversified away by investing in both Amazon and SFI INVESTIMENTOS 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 SFI INVESTIMENTOS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Amazon Inc and SFI INVESTIMENTOS DO, you can compare the effects of market volatilities on Amazon and SFI INVESTIMENTOS 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 SFI INVESTIMENTOS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amazon and SFI INVESTIMENTOS.
Diversification Opportunities for Amazon and SFI INVESTIMENTOS
-0.76 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Amazon and SFI is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding Amazon Inc and SFI INVESTIMENTOS DO in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SFI INVESTIMENTOS 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 SFI INVESTIMENTOS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SFI INVESTIMENTOS has no effect on the direction of Amazon i.e., Amazon and SFI INVESTIMENTOS go up and down completely randomly.
Pair Corralation between Amazon and SFI INVESTIMENTOS
Given the investment horizon of 90 days Amazon Inc is expected to generate 0.83 times more return on investment than SFI INVESTIMENTOS. However, Amazon Inc is 1.21 times less risky than SFI INVESTIMENTOS. It trades about 0.19 of its potential returns per unit of risk. SFI INVESTIMENTOS DO is currently generating about -0.05 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 Against |
| Strength | Weak |
| Accuracy | 90.48% |
| Values | Daily Returns |
Amazon Inc vs. SFI INVESTIMENTOS DO
Performance |
| Timeline |
| Amazon Inc |
| SFI INVESTIMENTOS |
Amazon and SFI INVESTIMENTOS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Amazon and SFI INVESTIMENTOS
The main advantage of trading using opposite Amazon and SFI INVESTIMENTOS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amazon position performs unexpectedly, SFI INVESTIMENTOS 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 SFI INVESTIMENTOS will offset losses from the drop in SFI INVESTIMENTOS's long position.The idea behind Amazon Inc and SFI INVESTIMENTOS DO 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.| SFI INVESTIMENTOS vs. Energisa SA | SFI INVESTIMENTOS vs. BTG Pactual Logstica | SFI INVESTIMENTOS vs. Plano Plano Desenvolvimento | SFI INVESTIMENTOS vs. Companhia Habitasul de |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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