Correlation Between Amazon and Metaline Contact
Can any of the company-specific risk be diversified away by investing in both Amazon and Metaline Contact 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 Metaline Contact into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Amazon Inc and Metaline Contact Mines, you can compare the effects of market volatilities on Amazon and Metaline Contact 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 Metaline Contact. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amazon and Metaline Contact.
Diversification Opportunities for Amazon and Metaline Contact
-0.8 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Amazon and Metaline is -0.8. Overlapping area represents the amount of risk that can be diversified away by holding Amazon Inc and Metaline Contact Mines in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Metaline Contact Mines 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 Metaline Contact. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Metaline Contact Mines has no effect on the direction of Amazon i.e., Amazon and Metaline Contact go up and down completely randomly.
Pair Corralation between Amazon and Metaline Contact
Given the investment horizon of 90 days Amazon Inc is expected to generate 0.68 times more return on investment than Metaline Contact. However, Amazon Inc is 1.47 times less risky than Metaline Contact. It trades about 0.19 of its potential returns per unit of risk. Metaline Contact Mines is currently generating about -0.22 per unit of risk. 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 | Significant |
| Accuracy | 95.24% |
| Values | Daily Returns |
Amazon Inc vs. Metaline Contact Mines
Performance |
| Timeline |
| Amazon Inc |
| Metaline Contact Mines |
Amazon and Metaline Contact Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Amazon and Metaline Contact
The main advantage of trading using opposite Amazon and Metaline Contact positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amazon position performs unexpectedly, Metaline Contact 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 Metaline Contact will offset losses from the drop in Metaline Contact's long position.The idea behind Amazon Inc and Metaline Contact Mines 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.| Metaline Contact vs. Azure Holding Group | Metaline Contact vs. Snoogoo Corp | Metaline Contact vs. Opus Magnum Ameris | Metaline Contact vs. Israel Acquisitions Corp |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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