Correlation Between Azure Holding and US Dollar

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

By analyzing existing cross correlation between Azure Holding Group and US Dollar Currency, you can compare the effects of market volatilities on Azure Holding and US Dollar 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 Azure Holding with a short position of US Dollar. Check out your portfolio center. Please also check ongoing floating volatility patterns of Azure Holding and US Dollar.

Diversification Opportunities for Azure Holding and US Dollar

-0.62

Correlation Coefficient

Azure Holding  US Dollar

Excellent diversification

The 3 months correlation between Azure and DXY is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Azure Holding Group and US Dollar Currency in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on US Dollar Currency and Azure Holding 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 Azure Holding Group are associated (or correlated) with US Dollar. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of US Dollar Currency has no effect on the direction of Azure Holding i.e., Azure Holding and US Dollar go up and down completely randomly.

Pair Corralation between Azure Holding and US Dollar

Given the investment horizon of 90 days Azure Holding Group is expected to generate 53.33 times more return on investment than US Dollar. However, Azure Holding is 53.33 times more volatile than US Dollar Currency. It trades about 0.04 of its potential returns per unit of risk. US Dollar Currency is currently generating about 0.19 per unit of risk. If you would invest  25.00  in Azure Holding Group on October 9, 2024 and sell it today you would lose (15.00) from holding Azure Holding Group or give up 60.0% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	98.41%
Values	Daily Returns

Azure Holding Group  vs.  US Dollar Currency

Pair Trading with Azure Holding and US Dollar

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

The idea behind Azure Holding Group and US Dollar Currency 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.