Correlation Between Amazon and MAWSON RES

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

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

Diversification Opportunities for Amazon and MAWSON RES

-0.33

Correlation Coefficient

Amazon  MAWSON RES

Very good diversification

The 3 months correlation between Amazon and MAWSON is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Amazon Inc and MAWSON RES in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MAWSON RES 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 MAWSON RES. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MAWSON RES has no effect on the direction of Amazon i.e., Amazon and MAWSON RES go up and down completely randomly.

Pair Corralation between Amazon and MAWSON RES

Assuming the 90 days trading horizon Amazon Inc is expected to generate 0.39 times more return on investment than MAWSON RES. However, Amazon Inc is 2.56 times less risky than MAWSON RES. It trades about 0.25 of its potential returns per unit of risk. MAWSON RES is currently generating about 0.0 per unit of risk. If you would invest  17,516  in Amazon Inc on October 27, 2024 and sell it today you would earn a total of  4,759  from holding Amazon Inc or generate 27.17% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	85.0%
Values	Daily Returns

Amazon Inc  vs.  MAWSON RES

Amazon Inc

Risk-Adjusted Performance

19 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Amazon Inc are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. In spite of very uncertain basic indicators, Amazon displayed solid returns over the last few months and may actually be approaching a breakup point.

MAWSON RES

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days MAWSON RES has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, MAWSON RES is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Amazon and MAWSON RES

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

The idea behind Amazon Inc and MAWSON RES 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.