Correlation Between Amazon and Panther Metals

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

By analyzing existing cross correlation between Amazon Inc and Panther Metals PLC, you can compare the effects of market volatilities on Amazon and Panther Metals 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 Panther Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amazon and Panther Metals.

Diversification Opportunities for Amazon and Panther Metals

-0.32

Correlation Coefficient

Amazon  Panther Metals

Very good diversification

The 3 months correlation between Amazon and Panther is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Amazon Inc and Panther Metals PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Panther Metals PLC 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 Panther Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Panther Metals PLC has no effect on the direction of Amazon i.e., Amazon and Panther Metals go up and down completely randomly.

Pair Corralation between Amazon and Panther Metals

Assuming the 90 days trading horizon Amazon Inc is expected to generate 0.47 times more return on investment than Panther Metals. However, Amazon Inc is 2.15 times less risky than Panther Metals. It trades about 0.02 of its potential returns per unit of risk. Panther Metals PLC is currently generating about -0.12 per unit of risk. If you would invest  18,900  in Amazon Inc on October 26, 2024 and sell it today you would earn a total of  100.00  from holding Amazon Inc or generate 0.53% return on investment over 90 days.

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

Amazon Inc  vs.  Panther Metals PLC

Amazon Inc

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Amazon Inc are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Amazon is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Panther Metals PLC

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Panther Metals PLC has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in February 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Amazon and Panther Metals

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

The idea behind Amazon Inc and Panther Metals PLC 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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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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.