Correlation Between Amazon and Exterran

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

Diversification Opportunities for Amazon and Exterran

-0.38
  Correlation Coefficient

Very good diversification

The 3 months correlation between Amazon and Exterran is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Amazon Inc and Exterran Corp. in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Exterran 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 Exterran. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Exterran has no effect on the direction of Amazon i.e., Amazon and Exterran go up and down completely randomly.

Pair Corralation between Amazon and Exterran

If you would invest  458.00  in Exterran on August 28, 2022 and sell it today you would earn a total of  0.00  from holding Exterran or generate 0.0% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy14.29%
ValuesDaily Returns

Amazon Inc  vs.  Exterran Corp.

 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 conflicting performance in the last few months, the Stock's basic indicators remain quite persistent which may send shares a bit higher in December 2022. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Amazon Price Channel

Exterran 
Exterran Performance
0 of 100
Over the last 90 days Exterran has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest sluggish performance, the Stock's basic indicators remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

Amazon and Exterran Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Amazon and Exterran

The main advantage of trading using opposite Amazon and Exterran positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amazon position performs unexpectedly, Exterran 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 Exterran will offset losses from the drop in Exterran's long position.
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The idea behind Amazon Inc and Exterran 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.

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