Correlation Between Amazon and Credit Suisse
Can any of the company-specific risk be diversified away by investing in both Amazon and Credit Suisse 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 Credit Suisse into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Amazon Inc and Credit Suisse, you can compare the effects of market volatilities on Amazon and Credit Suisse 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 Credit Suisse. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amazon and Credit Suisse.
Diversification Opportunities for Amazon and Credit Suisse
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Amazon and Credit is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Amazon Inc and Credit Suisse in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Credit Suisse 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 Credit Suisse. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Credit Suisse has no effect on the direction of Amazon i.e., Amazon and Credit Suisse go up and down completely randomly.
Pair Corralation between Amazon and Credit Suisse
If you would invest 19,578 in Amazon Inc on September 5, 2024 and sell it today you would earn a total of 1,766 from holding Amazon Inc or generate 9.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
Amazon Inc vs. Credit Suisse
Performance |
| Timeline |
| Amazon Inc |
| Credit Suisse |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Amazon and Credit Suisse Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Amazon and Credit Suisse
The main advantage of trading using opposite Amazon and Credit Suisse positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amazon position performs unexpectedly, Credit Suisse 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 Credit Suisse will offset losses from the drop in Credit Suisse's long position.The idea behind Amazon Inc and Credit Suisse 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.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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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