Correlation Between Bird Construction and Amazon CDR

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

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

Diversification Opportunities for Bird Construction and Amazon CDR

-0.68

Correlation Coefficient

Bird Construction  Amazon CDR

Excellent diversification

The 3 months correlation between Bird and Amazon is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding Bird Construction and Amazon CDR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amazon CDR and Bird Construction 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 Bird Construction are associated (or correlated) with Amazon CDR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amazon CDR has no effect on the direction of Bird Construction i.e., Bird Construction and Amazon CDR go up and down completely randomly.

Pair Corralation between Bird Construction and Amazon CDR

Assuming the 90 days trading horizon Bird Construction is expected to under-perform the Amazon CDR. In addition to that, Bird Construction is 1.26 times more volatile than Amazon CDR. It trades about -0.16 of its total potential returns per unit of risk. Amazon CDR is currently generating about 0.19 per unit of volatility. If you would invest  2,205  in Amazon CDR on October 23, 2024 and sell it today you would earn a total of  525.00  from holding Amazon CDR or generate 23.81% return on investment over 90 days.

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

Bird Construction  vs.  Amazon CDR

Bird Construction

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Bird Construction has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in February 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

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 abnormal technical and fundamental indicators, Amazon CDR exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Bird Construction and Amazon CDR

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

The idea behind Bird Construction and Amazon CDR 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.

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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.