Correlation Between Amazon and PolyPeptide Group
Can any of the company-specific risk be diversified away by investing in both Amazon and PolyPeptide Group 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 PolyPeptide Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Amazon Inc and PolyPeptide Group AG, you can compare the effects of market volatilities on Amazon and PolyPeptide Group 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 PolyPeptide Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amazon and PolyPeptide Group.
Diversification Opportunities for Amazon and PolyPeptide Group
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Amazon and PolyPeptide is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Amazon Inc and PolyPeptide Group AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PolyPeptide Group 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 PolyPeptide Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PolyPeptide Group has no effect on the direction of Amazon i.e., Amazon and PolyPeptide Group go up and down completely randomly.
Pair Corralation between Amazon and PolyPeptide Group
Given the investment horizon of 90 days Amazon Inc is expected to generate 0.75 times more return on investment than PolyPeptide Group. However, Amazon Inc is 1.33 times less risky than PolyPeptide Group. It trades about 0.23 of its potential returns per unit of risk. PolyPeptide Group AG is currently generating about -0.24 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 1,766 from holding Amazon Inc or generate 9.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Amazon Inc vs. PolyPeptide Group AG
Performance |
| Timeline |
| Amazon Inc |
| PolyPeptide Group |
Amazon and PolyPeptide Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Amazon and PolyPeptide Group
The main advantage of trading using opposite Amazon and PolyPeptide Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amazon position performs unexpectedly, PolyPeptide Group 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 PolyPeptide Group will offset losses from the drop in PolyPeptide Group's long position.The idea behind Amazon Inc and PolyPeptide Group AG 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.| PolyPeptide Group vs. Bachem Holding AG | PolyPeptide Group vs. Siegfried Holding | PolyPeptide Group vs. VAT Group AG | PolyPeptide Group vs. Comet Holding AG |
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 Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
Other Complementary Tools
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Positions Ratings 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 | |
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios |