Correlation Between Ehang Holdings and Amazon
Can any of the company-specific risk be diversified away by investing in both Ehang Holdings 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 Ehang Holdings and Amazon into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ehang Holdings and Amazon Inc, you can compare the effects of market volatilities on Ehang Holdings 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 Ehang Holdings with a short position of Amazon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ehang Holdings and Amazon.
Diversification Opportunities for Ehang Holdings and Amazon
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Ehang and Amazon is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Ehang Holdings and Amazon Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amazon Inc and Ehang Holdings 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 Ehang Holdings 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 Ehang Holdings i.e., Ehang Holdings and Amazon go up and down completely randomly.
Pair Corralation between Ehang Holdings and Amazon
Allowing for the 90-day total investment horizon Ehang Holdings is expected to under-perform the Amazon. In addition to that, Ehang Holdings is 2.78 times more volatile than Amazon Inc. It trades about -0.15 of its total potential returns per unit of risk. Amazon Inc is currently generating about -0.2 per unit of volatility. If you would invest 17,264 in Amazon Inc on March 7, 2024 and sell it today you would lose (934.00) from holding Amazon Inc or give up 5.41% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Ehang Holdings vs. Amazon Inc
Performance |
Timeline |
Ehang Holdings |
Amazon Inc |
Ehang Holdings and Amazon Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Ehang Holdings and Amazon
The main advantage of trading using opposite Ehang Holdings and Amazon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ehang Holdings 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.Ehang Holdings vs. Planet Labs PBC | Ehang Holdings vs. Eve Holding | Ehang Holdings vs. Redwire Corp | Ehang Holdings vs. Momentus |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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