Correlation Between Amazon and Lucky Minerals
Can any of the company-specific risk be diversified away by investing in both Amazon and Lucky Minerals 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 Lucky Minerals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Amazon Inc and Lucky Minerals, you can compare the effects of market volatilities on Amazon and Lucky Minerals 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 Lucky Minerals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amazon and Lucky Minerals.
Diversification Opportunities for Amazon and Lucky Minerals
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Amazon and Lucky is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Amazon Inc and Lucky Minerals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lucky Minerals 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 Lucky Minerals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lucky Minerals has no effect on the direction of Amazon i.e., Amazon and Lucky Minerals go up and down completely randomly.
Pair Corralation between Amazon and Lucky Minerals
If you would invest 19,578 in Amazon Inc on September 3, 2024 and sell it today you would earn a total of 1,211 from holding Amazon Inc or generate 6.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 95.24% |
| Values | Daily Returns |
Amazon Inc vs. Lucky Minerals
Performance |
| Timeline |
| Amazon Inc |
| Lucky Minerals |
Amazon and Lucky Minerals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Amazon and Lucky Minerals
The main advantage of trading using opposite Amazon and Lucky Minerals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amazon position performs unexpectedly, Lucky Minerals 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 Lucky Minerals will offset losses from the drop in Lucky Minerals' long position.The idea behind Amazon Inc and Lucky Minerals 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.| Lucky Minerals vs. NorthIsle Copper and | Lucky Minerals vs. Niobay Metals | Lucky Minerals vs. Kraken Energy Corp | Lucky Minerals vs. Canadian Palladium Resources |
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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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