Correlation Between Amazon and Klaveness Combination
Can any of the company-specific risk be diversified away by investing in both Amazon and Klaveness Combination 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 Klaveness Combination into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Amazon Inc and Klaveness Combination Carriers, you can compare the effects of market volatilities on Amazon and Klaveness Combination 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 Klaveness Combination. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amazon and Klaveness Combination.
Diversification Opportunities for Amazon and Klaveness Combination
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Amazon and Klaveness is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Amazon Inc and Klaveness Combination Carriers in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Klaveness Combination 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 Klaveness Combination. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Klaveness Combination has no effect on the direction of Amazon i.e., Amazon and Klaveness Combination go up and down completely randomly.
Pair Corralation between Amazon and Klaveness Combination
Given the investment horizon of 90 days Amazon Inc is expected to generate 1.1 times more return on investment than Klaveness Combination. However, Amazon is 1.1 times more volatile than Klaveness Combination Carriers. It trades about 0.07 of its potential returns per unit of risk. Klaveness Combination Carriers is currently generating about -0.07 per unit of risk. If you would invest 18,128 in Amazon Inc on September 3, 2024 and sell it today you would earn a total of 2,661 from holding Amazon Inc or generate 14.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 96.9% |
| Values | Daily Returns |
Amazon Inc vs. Klaveness Combination Carriers
Performance |
| Timeline |
| Amazon Inc |
| Klaveness Combination |
Amazon and Klaveness Combination Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Amazon and Klaveness Combination
The main advantage of trading using opposite Amazon and Klaveness Combination positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amazon position performs unexpectedly, Klaveness Combination 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 Klaveness Combination will offset losses from the drop in Klaveness Combination's long position.The idea behind Amazon Inc and Klaveness Combination Carriers 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.| Klaveness Combination vs. Grong Sparebank | Klaveness Combination vs. Awilco Drilling PLC | Klaveness Combination vs. Lea Bank ASA | Klaveness Combination vs. Polaris Media |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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