Correlation Between Amazon and Peak Resources
Can any of the company-specific risk be diversified away by investing in both Amazon and Peak Resources 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 Peak Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Amazon Inc and Peak Resources Limited, you can compare the effects of market volatilities on Amazon and Peak Resources 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 Peak Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amazon and Peak Resources.
Diversification Opportunities for Amazon and Peak Resources
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Amazon and Peak is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Amazon Inc and Peak Resources Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Peak Resources 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 Peak Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Peak Resources has no effect on the direction of Amazon i.e., Amazon and Peak Resources go up and down completely randomly.
Pair Corralation between Amazon and Peak Resources
If you would invest 19,578 in Amazon Inc on September 3, 2024 and sell it today you would earn a total of 1,211 from holding Amazon Inc or generate 6.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Amazon Inc vs. Peak Resources Limited
Performance |
| Timeline |
| Amazon Inc |
| Peak Resources |
Amazon and Peak Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Amazon and Peak Resources
The main advantage of trading using opposite Amazon and Peak Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amazon position performs unexpectedly, Peak Resources 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 Peak Resources will offset losses from the drop in Peak Resources' long position.The idea behind Amazon Inc and Peak Resources Limited 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.| Peak Resources vs. Apple Inc | Peak Resources vs. Microsoft | Peak Resources vs. Amazon Inc | Peak Resources vs. Alphabet Inc Class C |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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