Correlation Between FibraHotel and Amazon
Can any of the company-specific risk be diversified away by investing in both FibraHotel and Amazon 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 FibraHotel and Amazon into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FibraHotel and Amazon Inc, you can compare the effects of market volatilities on FibraHotel and Amazon 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 FibraHotel with a short position of Amazon. Check out your portfolio center. Please also check ongoing floating volatility patterns of FibraHotel and Amazon.
Diversification Opportunities for FibraHotel and Amazon
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between FibraHotel and Amazon is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding FibraHotel and Amazon Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amazon Inc and FibraHotel 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 FibraHotel are associated (or correlated) with Amazon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amazon Inc has no effect on the direction of FibraHotel i.e., FibraHotel and Amazon go up and down completely randomly.
Pair Corralation between FibraHotel and Amazon
Assuming the 90 days trading horizon FibraHotel is expected to generate 1.15 times more return on investment than Amazon. However, FibraHotel is 1.15 times more volatile than Amazon Inc. It trades about 0.21 of its potential returns per unit of risk. Amazon Inc is currently generating about 0.18 per unit of risk. If you would invest 780.00 in FibraHotel on August 25, 2024 and sell it today you would earn a total of 105.00 from holding FibraHotel or generate 13.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
FibraHotel vs. Amazon Inc
Performance |
| Timeline |
| FibraHotel |
| Amazon Inc |
FibraHotel and Amazon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FibraHotel and Amazon
The main advantage of trading using opposite FibraHotel and Amazon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FibraHotel position performs unexpectedly, Amazon 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 Amazon will offset losses from the drop in Amazon's long position.| FibraHotel vs. Promotora y Operadora | FibraHotel vs. Megacable Holdings S | FibraHotel vs. ALPEK SAB de | FibraHotel vs. Gentera SAB de |
| Amazon vs. Monster Beverage Corp | Amazon vs. Applied Materials | Amazon vs. Grupo Sports World | Amazon vs. Martin Marietta Materials |
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 Valuation module to check real value of public entities based on technical and fundamental data.
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