Correlation Between Amazon and Gesundheitswelt Chiemgau
Can any of the company-specific risk be diversified away by investing in both Amazon and Gesundheitswelt Chiemgau 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 Gesundheitswelt Chiemgau into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Amazon Inc and Gesundheitswelt Chiemgau AG, you can compare the effects of market volatilities on Amazon and Gesundheitswelt Chiemgau 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 Gesundheitswelt Chiemgau. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amazon and Gesundheitswelt Chiemgau.
Diversification Opportunities for Amazon and Gesundheitswelt Chiemgau
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Amazon and Gesundheitswelt is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Amazon Inc and Gesundheitswelt Chiemgau AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gesundheitswelt Chiemgau 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 Gesundheitswelt Chiemgau. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gesundheitswelt Chiemgau has no effect on the direction of Amazon i.e., Amazon and Gesundheitswelt Chiemgau go up and down completely randomly.
Pair Corralation between Amazon and Gesundheitswelt Chiemgau
Given the investment horizon of 90 days Amazon Inc is expected to generate 2.26 times more return on investment than Gesundheitswelt Chiemgau. However, Amazon is 2.26 times more volatile than Gesundheitswelt Chiemgau AG. It trades about 0.26 of its potential returns per unit of risk. Gesundheitswelt Chiemgau AG is currently generating about 0.09 per unit of risk. If you would invest 20,891 in Amazon Inc on September 13, 2024 and sell it today you would earn a total of 2,135 from holding Amazon Inc or generate 10.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Amazon Inc vs. Gesundheitswelt Chiemgau AG
Performance |
| Timeline |
| Amazon Inc |
| Gesundheitswelt Chiemgau |
Amazon and Gesundheitswelt Chiemgau Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Amazon and Gesundheitswelt Chiemgau
The main advantage of trading using opposite Amazon and Gesundheitswelt Chiemgau positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amazon position performs unexpectedly, Gesundheitswelt Chiemgau 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 Gesundheitswelt Chiemgau will offset losses from the drop in Gesundheitswelt Chiemgau's long position.The idea behind Amazon Inc and Gesundheitswelt Chiemgau AG 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.| Gesundheitswelt Chiemgau vs. Service International | Gesundheitswelt Chiemgau vs. Bright Horizons Family | Gesundheitswelt Chiemgau vs. BOYD GROUP SERVICES | Gesundheitswelt Chiemgau vs. Frontdoor |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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