Correlation Between SIERRA METALS and Amazon
Can any of the company-specific risk be diversified away by investing in both SIERRA METALS and Amazon 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 SIERRA METALS and Amazon into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SIERRA METALS and Amazon Inc, you can compare the effects of market volatilities on SIERRA METALS and Amazon 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 SIERRA METALS with a short position of Amazon. Check out your portfolio center. Please also check ongoing floating volatility patterns of SIERRA METALS and Amazon.
Diversification Opportunities for SIERRA METALS and Amazon
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between SIERRA and Amazon is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding SIERRA METALS and Amazon Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amazon Inc and SIERRA METALS 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 SIERRA METALS are associated (or correlated) with Amazon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amazon Inc has no effect on the direction of SIERRA METALS i.e., SIERRA METALS and Amazon go up and down completely randomly.
Pair Corralation between SIERRA METALS and Amazon
Assuming the 90 days trading horizon SIERRA METALS is expected to generate 1.02 times less return on investment than Amazon. In addition to that, SIERRA METALS is 1.97 times more volatile than Amazon Inc. It trades about 0.11 of its total potential returns per unit of risk. Amazon Inc is currently generating about 0.22 per unit of volatility. If you would invest 17,216 in Amazon Inc on September 23, 2024 and sell it today you would earn a total of 4,369 from holding Amazon Inc or generate 25.38% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
SIERRA METALS vs. Amazon Inc
Performance |
Timeline |
SIERRA METALS |
Amazon Inc |
SIERRA METALS and Amazon Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with SIERRA METALS and Amazon
The main advantage of trading using opposite SIERRA METALS and Amazon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SIERRA METALS position performs unexpectedly, Amazon 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 Amazon will offset losses from the drop in Amazon's long position.SIERRA METALS vs. Apple Inc | SIERRA METALS vs. Apple Inc | SIERRA METALS vs. Apple Inc | SIERRA METALS vs. Apple Inc |
Amazon vs. COFCO Joycome Foods | Amazon vs. Astral Foods Limited | Amazon vs. Nomad Foods | Amazon vs. GRIFFIN MINING LTD |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
Other Complementary Tools
Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
Fundamental Analysis View fundamental data based on most recent published financial statements | |
Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio |