Correlation Between Beijing Enterprises and Amazon
Can any of the company-specific risk be diversified away by investing in both Beijing Enterprises 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 Beijing Enterprises and Amazon into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Beijing Enterprises Holdings and Amazon Inc, you can compare the effects of market volatilities on Beijing Enterprises 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 Beijing Enterprises with a short position of Amazon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Beijing Enterprises and Amazon.
Diversification Opportunities for Beijing Enterprises and Amazon
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Beijing and Amazon is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Beijing Enterprises Holdings and Amazon Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amazon Inc and Beijing Enterprises 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 Beijing Enterprises Holdings 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 Beijing Enterprises i.e., Beijing Enterprises and Amazon go up and down completely randomly.
Pair Corralation between Beijing Enterprises and Amazon
Assuming the 90 days horizon Beijing Enterprises Holdings is expected to generate 1.21 times more return on investment than Amazon. However, Beijing Enterprises is 1.21 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 0.02 per unit of risk. If you would invest 295.00 in Beijing Enterprises Holdings on February 6, 2024 and sell it today you would earn a total of 27.00 from holding Beijing Enterprises Holdings or generate 9.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
Beijing Enterprises Holdings vs. Amazon Inc
Performance |
| Timeline |
| Beijing Enterprises |
| Amazon Inc |
Beijing Enterprises and Amazon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Beijing Enterprises and Amazon
The main advantage of trading using opposite Beijing Enterprises and Amazon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Beijing Enterprises 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.| Beijing Enterprises vs. Grupo Bimbo SAB | Beijing Enterprises vs. Grupo Financiero Inbursa | Beijing Enterprises vs. Arca Continental SAB | Beijing Enterprises vs. Becle SA de |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
Other Complementary Tools
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Fundamental Analysis View fundamental data based on most recent published financial statements |