Correlation Between Amazon and Johcm Emerging
Can any of the company-specific risk be diversified away by investing in both Amazon and Johcm Emerging 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 Johcm Emerging into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Amazon Inc and Johcm Emerging Markets, you can compare the effects of market volatilities on Amazon and Johcm Emerging 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 Johcm Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amazon and Johcm Emerging.
Diversification Opportunities for Amazon and Johcm Emerging
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Amazon and Johcm is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Amazon Inc and Johcm Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Johcm Emerging Markets 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 Johcm Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Johcm Emerging Markets has no effect on the direction of Amazon i.e., Amazon and Johcm Emerging go up and down completely randomly.
Pair Corralation between Amazon and Johcm Emerging
Given the investment horizon of 90 days Amazon Inc is expected to generate 2.65 times more return on investment than Johcm Emerging. However, Amazon is 2.65 times more volatile than Johcm Emerging Markets. It trades about 0.1 of its potential returns per unit of risk. Johcm Emerging Markets is currently generating about 0.08 per unit of risk. If you would invest 9,158 in Amazon Inc on September 4, 2024 and sell it today you would earn a total of 11,913 from holding Amazon Inc or generate 130.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Amazon Inc vs. Johcm Emerging Markets
Performance |
| Timeline |
| Amazon Inc |
| Johcm Emerging Markets |
Amazon and Johcm Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Amazon and Johcm Emerging
The main advantage of trading using opposite Amazon and Johcm Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amazon position performs unexpectedly, Johcm Emerging 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 Johcm Emerging will offset losses from the drop in Johcm Emerging's long position.The idea behind Amazon Inc and Johcm Emerging Markets 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.| Johcm Emerging vs. Ms Global Fixed | Johcm Emerging vs. The Hartford Equity | Johcm Emerging vs. Calamos Global Equity | Johcm Emerging vs. Gmo Global Equity |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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