Correlation Between Amazon and DKIGIADKKH

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Can any of the company-specific risk be diversified away by investing in both Amazon and DKIGIADKKH 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 DKIGIADKKH 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 Danske Invest, you can compare the effects of market volatilities on Amazon and DKIGIADKKH 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 DKIGIADKKH. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amazon and DKIGIADKKH.

Diversification Opportunities for Amazon and DKIGIADKKH

0.95
  Correlation Coefficient

Almost no diversification

The 3 months correlation between Amazon and DKIGIADKKH is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Amazon Inc and Investeringsforeningen Danske 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 DKIGIADKKH. 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 DKIGIADKKH go up and down completely randomly.

Pair Corralation between Amazon and DKIGIADKKH

Given the investment horizon of 90 days Amazon Inc is expected to generate 2.79 times more return on investment than DKIGIADKKH. However, Amazon is 2.79 times more volatile than Investeringsforeningen Danske Invest. It trades about 0.11 of its potential returns per unit of risk. Investeringsforeningen Danske Invest is currently generating about 0.14 per unit of risk. If you would invest  13,801  in Amazon Inc on December 29, 2023 and sell it today you would earn a total of  4,237  from holding Amazon Inc or generate 30.7% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Strong
Accuracy97.97%
ValuesDaily Returns

Amazon Inc  vs.  Investeringsforeningen Danske

 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 conflicting basic indicators, Amazon displayed solid returns over the last few months and may actually be approaching a breakup point.
Investeringsforeningen 

Risk-Adjusted Performance

18 of 100

 
Low
 
High
Solid
Compared to the overall equity markets, risk-adjusted returns on investments in Investeringsforeningen Danske Invest are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak forward indicators, DKIGIADKKH may actually be approaching a critical reversion point that can send shares even higher in April 2024.

Amazon and DKIGIADKKH Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Amazon and DKIGIADKKH

The main advantage of trading using opposite Amazon and DKIGIADKKH positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amazon position performs unexpectedly, DKIGIADKKH 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 DKIGIADKKH will offset losses from the drop in DKIGIADKKH's long position.
The idea behind Amazon Inc and Investeringsforeningen Danske Invest 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.

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