Correlation Between Amazon and Nasdaq CTA
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By analyzing existing cross correlation between Amazon Inc and Nasdaq CTA Artificial, you can compare the effects of market volatilities on Amazon and Nasdaq CTA 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 Nasdaq CTA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amazon and Nasdaq CTA.
Diversification Opportunities for Amazon and Nasdaq CTA
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Amazon and Nasdaq is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Amazon Inc and Nasdaq CTA Artificial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nasdaq CTA Artificial 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 Nasdaq CTA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nasdaq CTA Artificial has no effect on the direction of Amazon i.e., Amazon and Nasdaq CTA go up and down completely randomly.
Pair Corralation between Amazon and Nasdaq CTA
Given the investment horizon of 90 days Amazon Inc is expected to generate 1.52 times more return on investment than Nasdaq CTA. However, Amazon is 1.52 times more volatile than Nasdaq CTA Artificial. It trades about 0.43 of its potential returns per unit of risk. Nasdaq CTA Artificial is currently generating about 0.26 per unit of risk. If you would invest 20,170 in Amazon Inc on September 19, 2024 and sell it today you would earn a total of 2,945 from holding Amazon Inc or generate 14.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.45% |
| Values | Daily Returns |
Amazon Inc vs. Nasdaq CTA Artificial
Performance |
| Timeline |
Amazon and Nasdaq CTA Volatility Contrast
Predicted Return Density |
| Returns |
Amazon Inc
Pair trading matchups for Amazon
Nasdaq CTA Artificial
Pair trading matchups for Nasdaq CTA
Pair Trading with Amazon and Nasdaq CTA
The main advantage of trading using opposite Amazon and Nasdaq CTA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amazon position performs unexpectedly, Nasdaq CTA 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 Nasdaq CTA will offset losses from the drop in Nasdaq CTA's long position.The idea behind Amazon Inc and Nasdaq CTA Artificial 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.| Nasdaq CTA vs. Lucid Group | Nasdaq CTA vs. Dana Inc | Nasdaq CTA vs. Thor Industries | Nasdaq CTA vs. PACCAR Inc |
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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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