Correlation Between Amazon and Smead Value
Can any of the company-specific risk be diversified away by investing in both Amazon and Smead Value 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 Smead Value into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Amazon Inc and Smead Value Fund, you can compare the effects of market volatilities on Amazon and Smead Value 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 Smead Value. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amazon and Smead Value.
Diversification Opportunities for Amazon and Smead Value
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Amazon and Smead is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Amazon Inc and Smead Value Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Smead Value Fund 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 Smead Value. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Smead Value Fund has no effect on the direction of Amazon i.e., Amazon and Smead Value go up and down completely randomly.
Pair Corralation between Amazon and Smead Value
If you would invest 20,891 in Amazon Inc on September 13, 2024 and sell it today you would earn a total of 2,135 from holding Amazon Inc or generate 10.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
Amazon Inc vs. Smead Value Fund
Performance |
| Timeline |
| Amazon Inc |
| Smead Value Fund |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Amazon and Smead Value Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Amazon and Smead Value
The main advantage of trading using opposite Amazon and Smead Value positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amazon position performs unexpectedly, Smead Value 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 Smead Value will offset losses from the drop in Smead Value's long position.The idea behind Amazon Inc and Smead Value Fund 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.| Smead Value vs. Federated Hermes Inflation | Smead Value vs. Simt Multi Asset Inflation | Smead Value vs. Short Duration Inflation | Smead Value vs. Fidelity Sai Inflationfocused |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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