Correlation Between Amazon and Inter Cl

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

Diversification Opportunities for Amazon and Inter Cl

0.83
  Correlation Coefficient

Very poor diversification

The 3 months correlation between Amazon and Inter is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Amazon Inc and Inter Cl A in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Inter Cl A 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 Inter Cl. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Inter Cl A has no effect on the direction of Amazon i.e., Amazon and Inter Cl go up and down completely randomly.

Pair Corralation between Amazon and Inter Cl

Given the investment horizon of 90 days Amazon Inc is expected to under-perform the Inter Cl. But the stock apears to be less risky and, when comparing its historical volatility, Amazon Inc is 38.62 times less risky than Inter Cl. The stock trades about -0.03 of its potential returns per unit of risk. The Inter Cl A is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  0.00  in Inter Cl A on August 31, 2022 and sell it today you would earn a total of  239.00  from holding Inter Cl A or generate 9.223372036854776E16% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthStrong
Accuracy22.54%
ValuesDaily Returns

Amazon Inc  vs.  Inter Cl A

 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

Inter Cl A 
Inter Performance
0 of 100
Over the last 90 days Inter Cl A has generated negative risk-adjusted returns adding no value to investors with long positions. Even with weak performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in December 2022. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Inter Price Channel

Amazon and Inter Cl Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Amazon and Inter Cl

The main advantage of trading using opposite Amazon and Inter Cl positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amazon position performs unexpectedly, Inter Cl 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 Inter Cl will offset losses from the drop in Inter Cl's long position.
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The idea behind Amazon Inc and Inter Cl A 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.

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