Correlation Between Amazon and Living Cell
Can any of the company-specific risk be diversified away by investing in both Amazon and Living Cell 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 Living Cell into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Amazon Inc and Living Cell Technologies, you can compare the effects of market volatilities on Amazon and Living Cell 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 Living Cell. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amazon and Living Cell.
Diversification Opportunities for Amazon and Living Cell
-0.24 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Amazon and Living is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Amazon Inc and Living Cell Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Living Cell Technologies 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 Living Cell. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Living Cell Technologies has no effect on the direction of Amazon i.e., Amazon and Living Cell go up and down completely randomly.
Pair Corralation between Amazon and Living Cell
If you would invest 19,578 in Amazon Inc on September 4, 2024 and sell it today you would earn a total of 1,493 from holding Amazon Inc or generate 7.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.24% |
| Values | Daily Returns |
Amazon Inc vs. Living Cell Technologies
Performance |
| Timeline |
| Amazon Inc |
| Living Cell Technologies |
Amazon and Living Cell Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Amazon and Living Cell
The main advantage of trading using opposite Amazon and Living Cell positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amazon position performs unexpectedly, Living Cell 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 Living Cell will offset losses from the drop in Living Cell's long position.The idea behind Amazon Inc and Living Cell Technologies 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.| Living Cell vs. Therapeutic Solutions International | Living Cell vs. Alpha Cognition | Living Cell vs. Vg Life Sciences | Living Cell vs. Adagene |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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