Correlation Between Amazon and WB Burgers
Can any of the company-specific risk be diversified away by investing in both Amazon and WB Burgers 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 WB Burgers into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Amazon Inc and WB Burgers Asia, you can compare the effects of market volatilities on Amazon and WB Burgers 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 WB Burgers. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amazon and WB Burgers.
Diversification Opportunities for Amazon and WB Burgers
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Amazon and WBBA is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Amazon Inc and WB Burgers Asia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WB Burgers Asia 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 WB Burgers. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WB Burgers Asia has no effect on the direction of Amazon i.e., Amazon and WB Burgers go up and down completely randomly.
Pair Corralation between Amazon and WB Burgers
Given the investment horizon of 90 days Amazon is expected to generate 147.87 times less return on investment than WB Burgers. But when comparing it to its historical volatility, Amazon Inc is 89.63 times less risky than WB Burgers. It trades about 0.1 of its potential returns per unit of risk. WB Burgers Asia is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 9.00 in WB Burgers Asia on September 12, 2024 and sell it today you would earn a total of 31.00 from holding WB Burgers Asia or generate 344.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 60.12% |
| Values | Daily Returns |
Amazon Inc vs. WB Burgers Asia
Performance |
| Timeline |
| Amazon Inc |
| WB Burgers Asia |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Amazon and WB Burgers Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Amazon and WB Burgers
The main advantage of trading using opposite Amazon and WB Burgers positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amazon position performs unexpectedly, WB Burgers 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 WB Burgers will offset losses from the drop in WB Burgers' long position.The idea behind Amazon Inc and WB Burgers Asia 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.| WB Burgers vs. Oncologix Tech | WB Burgers vs. Blockchain Industries | WB Burgers vs. TransAKT | WB Burgers vs. China Health Management |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
Other Complementary Tools
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios |