Correlation Between Amazon CDR and Mccoy Global

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

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

Diversification Opportunities for Amazon CDR and Mccoy Global

-0.59

Correlation Coefficient

Amazon CDR  Mccoy Global

Excellent diversification

The 3 months correlation between Amazon and Mccoy is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Amazon CDR and Mccoy Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mccoy Global 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 Mccoy Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mccoy Global has no effect on the direction of Amazon CDR i.e., Amazon CDR and Mccoy Global go up and down completely randomly.

Pair Corralation between Amazon CDR and Mccoy Global

Assuming the 90 days trading horizon Amazon CDR is expected to under-perform the Mccoy Global. But the stock apears to be less risky and, when comparing its historical volatility, Amazon CDR is 1.02 times less risky than Mccoy Global. The stock trades about -0.02 of its potential returns per unit of risk. The Mccoy Global is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest  273.00  in Mccoy Global on October 8, 2024 and sell it today you would earn a total of  14.00  from holding Mccoy Global or generate 5.13% return on investment over 90 days.

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

Amazon CDR  vs.  Mccoy Global

Amazon CDR

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Amazon CDR are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak technical and fundamental indicators, Amazon CDR exhibited solid returns over the last few months and may actually be approaching a breakup point.

Mccoy Global

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Mccoy Global are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy fundamental drivers, Mccoy Global is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Amazon CDR and Mccoy Global

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

The idea behind Amazon CDR and Mccoy Global 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.