Correlation Between Amazon CDR and BLUERUSH Media

Can any of the company-specific risk be diversified away by investing in both Amazon CDR and BLUERUSH Media 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 CDR and BLUERUSH Media into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Amazon CDR and BLUERUSH Media Group, you can compare the effects of market volatilities on Amazon CDR and BLUERUSH Media 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 CDR with a short position of BLUERUSH Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amazon CDR and BLUERUSH Media.

Diversification Opportunities for Amazon CDR and BLUERUSH Media

-0.66

Correlation Coefficient

Amazon CDR  BLUERUSH Media

Excellent diversification

The 3 months correlation between Amazon and BLUERUSH is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Amazon CDR and BLUERUSH Media Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BLUERUSH Media Group and Amazon CDR 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 CDR are associated (or correlated) with BLUERUSH Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BLUERUSH Media Group has no effect on the direction of Amazon CDR i.e., Amazon CDR and BLUERUSH Media go up and down completely randomly.

Pair Corralation between Amazon CDR and BLUERUSH Media

Assuming the 90 days trading horizon Amazon CDR is expected to generate 10.18 times less return on investment than BLUERUSH Media. But when comparing it to its historical volatility, Amazon CDR is 13.33 times less risky than BLUERUSH Media. It trades about 0.13 of its potential returns per unit of risk. BLUERUSH Media Group is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  1.00  in BLUERUSH Media Group on September 20, 2024 and sell it today you would earn a total of  0.00  from holding BLUERUSH Media Group or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Amazon CDR  vs.  BLUERUSH Media Group

Amazon CDR

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Amazon CDR are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of rather unfluctuating technical and fundamental indicators, Amazon CDR exhibited solid returns over the last few months and may actually be approaching a breakup point.

BLUERUSH Media Group

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in BLUERUSH Media Group are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, BLUERUSH Media showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Amazon CDR and BLUERUSH Media

The main advantage of trading using opposite Amazon CDR and BLUERUSH Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amazon CDR position performs unexpectedly, BLUERUSH Media 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 BLUERUSH Media will offset losses from the drop in BLUERUSH Media's long position.

The idea behind Amazon CDR and BLUERUSH Media Group 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.