Correlation Between Atos SE and Amazon
Can any of the company-specific risk be diversified away by investing in both Atos SE 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 Atos SE and Amazon into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Atos SE and Amazon Inc, you can compare the effects of market volatilities on Atos SE 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 Atos SE with a short position of Amazon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Atos SE and Amazon.
Diversification Opportunities for Atos SE and Amazon
Pay attention - limited upside
The 3 months correlation between Atos and Amazon is -0.84. Overlapping area represents the amount of risk that can be diversified away by holding Atos SE and Amazon Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amazon Inc and Atos SE 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 Atos SE 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 Atos SE i.e., Atos SE and Amazon go up and down completely randomly.
Pair Corralation between Atos SE and Amazon
Assuming the 90 days horizon Atos SE is expected to generate 6.97 times more return on investment than Amazon. However, Atos SE is 6.97 times more volatile than Amazon Inc. It trades about 0.11 of its potential returns per unit of risk. Amazon Inc is currently generating about -0.04 per unit of risk. If you would invest 186.00 in Atos SE on January 25, 2024 and sell it today you would earn a total of 28.00 from holding Atos SE or generate 15.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Atos SE vs. Amazon Inc
Performance |
| Timeline |
| Atos SE |
| Amazon Inc |
Atos SE and Amazon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Atos SE and Amazon
The main advantage of trading using opposite Atos SE and Amazon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Atos SE 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.The idea behind Atos SE and Amazon Inc 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.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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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