Correlation Between Amazon and BAIGAI

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Can any of the company-specific risk be diversified away by investing in both Amazon and BAIGAI 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 BAIGAI into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Amazon Inc and Investeringsforeningen Bankinvest , you can compare the effects of market volatilities on Amazon and BAIGAI 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 BAIGAI. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amazon and BAIGAI.

Diversification Opportunities for Amazon and BAIGAI

0.94
  Correlation Coefficient

Almost no diversification

The 3 months correlation between Amazon and BAIGAI is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Amazon Inc and Investeringsforeningen Bankinv in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Investeringsforeningen 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 BAIGAI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Investeringsforeningen has no effect on the direction of Amazon i.e., Amazon and BAIGAI go up and down completely randomly.

Pair Corralation between Amazon and BAIGAI

Given the investment horizon of 90 days Amazon Inc is expected to generate 2.11 times more return on investment than BAIGAI. However, Amazon is 2.11 times more volatile than Investeringsforeningen Bankinvest . It trades about 0.14 of its potential returns per unit of risk. Investeringsforeningen Bankinvest is currently generating about 0.26 per unit of risk. If you would invest  17,354  in Amazon Inc on December 29, 2023 and sell it today you would earn a total of  629.00  from holding Amazon Inc or generate 3.62% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Strong
Accuracy100.0%
ValuesDaily Returns

Amazon Inc  vs.  Investeringsforeningen Bankinv

 Performance 
       Timeline  
Amazon Inc 

Risk-Adjusted Performance

13 of 100

 
Low
 
High
Good
Compared to the overall equity markets, risk-adjusted returns on investments in Amazon Inc are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Amazon displayed solid returns over the last few months and may actually be approaching a breakup point.
Investeringsforeningen 

Risk-Adjusted Performance

22 of 100

 
Low
 
High
Solid
Compared to the overall equity markets, risk-adjusted returns on investments in Investeringsforeningen Bankinvest are ranked lower than 22 (%) of all funds and portfolios of funds over the last 90 days. Despite somewhat conflicting basic indicators, BAIGAI may actually be approaching a critical reversion point that can send shares even higher in April 2024.

Amazon and BAIGAI Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Amazon and BAIGAI

The main advantage of trading using opposite Amazon and BAIGAI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amazon position performs unexpectedly, BAIGAI 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 BAIGAI will offset losses from the drop in BAIGAI's long position.
The idea behind Amazon Inc and Investeringsforeningen Bankinvest 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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