Correlation Between Amazon and Boson Protocol

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

Diversification Opportunities for Amazon and Boson Protocol

0.81
  Correlation Coefficient

Very poor diversification

The 3 months correlation between Amazon and Boson is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Amazon Inc and Boson Protocol in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Boson Protocol 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 Boson Protocol. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Boson Protocol has no effect on the direction of Amazon i.e., Amazon and Boson Protocol go up and down completely randomly.

Pair Corralation between Amazon and Boson Protocol

Given the investment horizon of 90 days Amazon is expected to generate 6.15 times less return on investment than Boson Protocol. But when comparing it to its historical volatility, Amazon Inc is 2.23 times less risky than Boson Protocol. It trades about 0.01 of its potential returns per unit of risk. Boson Protocol is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  22.00  in Boson Protocol on July 4, 2022 and sell it today you would earn a total of  0.00  from holding Boson Protocol or generate 0.0% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthStrong
Accuracy96.97%
ValuesDaily Returns

Amazon Inc  vs.  Boson Protocol

 Performance (%) 
       Timeline  
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

Boson Protocol 
Boson Performance
2 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Boson Protocol are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Boson Protocol may actually be approaching a critical reversion point that can send shares even higher in November 2022.

Boson Price Channel

Amazon and Boson Protocol Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Amazon and Boson Protocol

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

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