Correlation Between Canadian Overseas and Amazon
Can any of the company-specific risk be diversified away by investing in both Canadian Overseas and Amazon 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 Canadian Overseas and Amazon into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Canadian Overseas Petroleum and Amazon Inc, you can compare the effects of market volatilities on Canadian Overseas and Amazon 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 Canadian Overseas with a short position of Amazon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Canadian Overseas and Amazon.
Diversification Opportunities for Canadian Overseas and Amazon
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Canadian and Amazon is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Canadian Overseas Petroleum and Amazon Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amazon Inc and Canadian Overseas 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 Canadian Overseas Petroleum are associated (or correlated) with Amazon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amazon Inc has no effect on the direction of Canadian Overseas i.e., Canadian Overseas and Amazon go up and down completely randomly.
Pair Corralation between Canadian Overseas and Amazon
Assuming the 90 days horizon Canadian Overseas Petroleum is expected to generate 21.77 times more return on investment than Amazon. However, Canadian Overseas is 21.77 times more volatile than Amazon Inc. It trades about 0.06 of its potential returns per unit of risk. Amazon Inc is currently generating about 0.13 per unit of risk. If you would invest 7.30 in Canadian Overseas Petroleum on January 20, 2024 and sell it today you would lose (7.10) from holding Canadian Overseas Petroleum or give up 97.26% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.6% |
| Values | Daily Returns |
Canadian Overseas Petroleum vs. Amazon Inc
Performance |
| Timeline |
| Canadian Overseas |
| Amazon Inc |
Canadian Overseas and Amazon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Canadian Overseas and Amazon
The main advantage of trading using opposite Canadian Overseas and Amazon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Canadian Overseas position performs unexpectedly, Amazon 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 will offset losses from the drop in Amazon's long position.| Canadian Overseas vs. Compania de Minas | Canadian Overseas vs. McEwen Mining | Canadian Overseas vs. Endeavour Silver Corp | Canadian Overseas vs. Hecla Mining |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
Other Complementary Tools
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Stocks Directory Find actively traded stocks across global markets | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum |