Correlation Between Amazon and Meta Epsi
Can any of the company-specific risk be diversified away by investing in both Amazon and Meta Epsi 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 Meta Epsi into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Amazon Inc and Meta Epsi Tbk, you can compare the effects of market volatilities on Amazon and Meta Epsi 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 Meta Epsi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amazon and Meta Epsi.
Diversification Opportunities for Amazon and Meta Epsi
Excellent diversification
The 3 months correlation between Amazon and Meta is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Amazon Inc and Meta Epsi Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Meta Epsi Tbk 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 Meta Epsi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Meta Epsi Tbk has no effect on the direction of Amazon i.e., Amazon and Meta Epsi go up and down completely randomly.
Pair Corralation between Amazon and Meta Epsi
Given the investment horizon of 90 days Amazon Inc is expected to generate 0.43 times more return on investment than Meta Epsi. However, Amazon Inc is 2.33 times less risky than Meta Epsi. It trades about 0.2 of its potential returns per unit of risk. Meta Epsi Tbk 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 | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Amazon Inc vs. Meta Epsi Tbk
Performance |
| Timeline |
| Amazon Inc |
| Meta Epsi Tbk |
Amazon and Meta Epsi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Amazon and Meta Epsi
The main advantage of trading using opposite Amazon and Meta Epsi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amazon position performs unexpectedly, Meta Epsi 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 Meta Epsi will offset losses from the drop in Meta Epsi's long position.The idea behind Amazon Inc and Meta Epsi Tbk 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.| Meta Epsi vs. PT Hetzer Medical | Meta Epsi vs. PT Dewi Shri | Meta Epsi vs. PT Sari Kreasi | Meta Epsi vs. Gaya Abadi Sempurna |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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