Correlation Between Amazon and Barry Callebaut
Can any of the company-specific risk be diversified away by investing in both Amazon and Barry Callebaut 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 Barry Callebaut into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Amazon Inc and Barry Callebaut AG, you can compare the effects of market volatilities on Amazon and Barry Callebaut 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 Barry Callebaut. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amazon and Barry Callebaut.
Diversification Opportunities for Amazon and Barry Callebaut
-0.84 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Amazon and Barry is -0.84. Overlapping area represents the amount of risk that can be diversified away by holding Amazon Inc and Barry Callebaut AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Barry Callebaut AG 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 Barry Callebaut. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Barry Callebaut AG has no effect on the direction of Amazon i.e., Amazon and Barry Callebaut go up and down completely randomly.
Pair Corralation between Amazon and Barry Callebaut
Given the investment horizon of 90 days Amazon Inc is expected to generate 0.92 times more return on investment than Barry Callebaut. However, Amazon Inc is 1.08 times less risky than Barry Callebaut. It trades about 0.2 of its potential returns per unit of risk. Barry Callebaut AG is currently generating about -0.14 per unit of risk. If you would invest 18,649 in Amazon Inc on September 13, 2024 and sell it today you would earn a total of 4,377 from holding Amazon Inc or generate 23.47% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Significant |
Accuracy | 98.44% |
Values | Daily Returns |
Amazon Inc vs. Barry Callebaut AG
Performance |
Timeline |
Amazon Inc |
Barry Callebaut AG |
Amazon and Barry Callebaut Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Amazon and Barry Callebaut
The main advantage of trading using opposite Amazon and Barry Callebaut positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amazon position performs unexpectedly, Barry Callebaut 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 Barry Callebaut will offset losses from the drop in Barry Callebaut's long position.The idea behind Amazon Inc and Barry Callebaut AG 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.Barry Callebaut vs. Mondelez International | Barry Callebaut vs. Tootsie Roll Industries | Barry Callebaut vs. Rocky Mountain Chocolate | Barry Callebaut vs. Chocoladefabriken Lindt Sprngli |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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