Correlation Between Amazon and CBOE Low
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By analyzing existing cross correlation between Amazon Inc and CBOE Low Volatility, you can compare the effects of market volatilities on Amazon and CBOE Low 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 CBOE Low. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amazon and CBOE Low.
Diversification Opportunities for Amazon and CBOE Low
Very poor diversification
The 3 months correlation between Amazon and CBOE is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Amazon Inc and CBOE Low Volatility in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CBOE Low Volatility 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 CBOE Low. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CBOE Low Volatility has no effect on the direction of Amazon i.e., Amazon and CBOE Low go up and down completely randomly.
Pair Corralation between Amazon and CBOE Low
Given the investment horizon of 90 days Amazon Inc is expected to generate 5.13 times more return on investment than CBOE Low. However, Amazon is 5.13 times more volatile than CBOE Low Volatility. It trades about 0.22 of its potential returns per unit of risk. CBOE Low Volatility is currently generating about 0.12 per unit of risk. If you would invest 20,684 in Amazon Inc on September 12, 2024 and sell it today you would earn a total of 1,820 from holding Amazon Inc or generate 8.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Amazon Inc vs. CBOE Low Volatility
Performance |
| Timeline |
Amazon and CBOE Low Volatility Contrast
Predicted Return Density |
| Returns |
Amazon Inc
Pair trading matchups for Amazon
CBOE Low Volatility
Pair trading matchups for CBOE Low
Pair Trading with Amazon and CBOE Low
The main advantage of trading using opposite Amazon and CBOE Low positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amazon position performs unexpectedly, CBOE Low 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 CBOE Low will offset losses from the drop in CBOE Low's long position.The idea behind Amazon Inc and CBOE Low Volatility 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.| CBOE Low vs. Avient Corp | CBOE Low vs. Reservoir Media | CBOE Low vs. Luxfer Holdings PLC | CBOE Low vs. RCS MediaGroup SpA |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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