Two Equities Correlation Analysis
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AMDWX
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This model provides you with a quick lookup of cross correlation between two equities. Please specify two instruments to run the correlation.
Diversification Opportunities for Amana Developing and NYSE Composite
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Amana and NYSE is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Amana Developing World and NYSE Composite in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NYSE Composite and Amana Developing 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 Amana Developing World are associated (or correlated) with NYSE Composite. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NYSE Composite has no effect on the direction of Amana Developing i.e., Amana Developing and NYSE Composite go up and down completely randomly.
Pair Corralation between Amana Developing and NYSE Composite
Assuming the 90 days horizon Amana Developing World is expected to under-perform the NYSE Composite. In addition to that, Amana Developing is 1.02 times more volatile than NYSE Composite. It trades about -0.31 of its total potential returns per unit of risk. NYSE Composite is currently generating about -0.1 per unit of volatility. If you would invest 1,807,715 in NYSE Composite on January 25, 2024 and sell it today you would lose (28,439) from holding NYSE Composite or give up 1.57% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Amana Developing World vs. NYSE Composite
Performance |
Timeline |
Amana Developing and NYSE Composite Volatility Contrast
Predicted Return Density |
Returns |
Amana Developing World
Pair trading matchups for Amana Developing
NYSE Composite
Pair trading matchups for NYSE Composite
Pair Trading with Amana Developing and NYSE Composite
The main advantage of trading using opposite Amana Developing and NYSE Composite positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amana Developing position performs unexpectedly, NYSE Composite 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 NYSE Composite will offset losses from the drop in NYSE Composite's long position.Amana Developing vs. Amana Income Fund | Amana Developing vs. Amana Growth Fund | Amana Developing vs. Amana Participation Fund | Amana Developing vs. Azzad Ethical Fund |
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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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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