Correlation Between Airgain and Amazon

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

Diversification Opportunities for Airgain and Amazon

0.55
  Correlation Coefficient

Very weak diversification

The 24 months correlation between Airgain and Amazon is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Airgain and Amazon Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amazon Inc and Airgain 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 Airgain 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 Airgain i.e., Airgain and Amazon go up and down completely randomly.

Pair Corralation between Airgain and Amazon

Given the investment horizon of 90 days Airgain is expected to generate 0.96 times more return on investment than Amazon. However, Airgain is 1.04 times less risky than Amazon. It trades about 0.21 of its potential returns per unit of risk. Amazon Inc is currently generating about 0.07 per unit of risk. If you would invest  700.00  in Airgain on September 3, 2022 and sell it today you would earn a total of  105.20  from holding Airgain or generate 15.03% return on investment over 90 days.
Time Period24 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy95.45%
ValuesDaily Returns

Airgain  vs.  Amazon Inc

 Performance (%) 
       Timeline  
Airgain 
Airgain Performance
0 of 100
Over the last 90 days Airgain has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, Airgain is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Airgain Price Channel

Amazon Inc 
Amazon Performance
0 of 100
Over the last 90 days Amazon Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent basic indicators, Amazon is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

Amazon Price Channel

Airgain and Amazon Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Airgain and Amazon

The main advantage of trading using opposite Airgain and Amazon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Airgain 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.
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The idea behind Airgain 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.
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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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.

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