Correlation Between AAK AB and Amazon
Can any of the company-specific risk be diversified away by investing in both AAK AB 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 AAK AB and Amazon into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AAK AB and Amazon Inc, you can compare the effects of market volatilities on AAK AB 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 AAK AB with a short position of Amazon. Check out your portfolio center. Please also check ongoing floating volatility patterns of AAK AB and Amazon.
Diversification Opportunities for AAK AB and Amazon
Pay attention - limited upside
The 3 months correlation between AAK and Amazon is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding AAK AB and Amazon Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amazon Inc and AAK AB 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 AAK AB 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 AAK AB i.e., AAK AB and Amazon go up and down completely randomly.
Pair Corralation between AAK AB and Amazon
If you would invest 18,519 in Amazon Inc on February 7, 2024 and sell it today you would earn a total of 351.00 from holding Amazon Inc or generate 1.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
AAK AB vs. Amazon Inc
Performance |
| Timeline |
| AAK AB |
| Amazon Inc |
AAK AB and Amazon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AAK AB and Amazon
The main advantage of trading using opposite AAK AB and Amazon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AAK AB 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 AAK AB 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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