Correlation Between Amazon and MONEYSUPERMARKET
Can any of the company-specific risk be diversified away by investing in both Amazon and MONEYSUPERMARKET 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 Amazon and MONEYSUPERMARKET into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Amazon Inc and MONEYSUPERMARKET, you can compare the effects of market volatilities on Amazon and MONEYSUPERMARKET 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 Amazon with a short position of MONEYSUPERMARKET. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amazon and MONEYSUPERMARKET.
Diversification Opportunities for Amazon and MONEYSUPERMARKET
-0.73 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Amazon and MONEYSUPERMARKET is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding Amazon Inc and MONEYSUPERMARKET in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MONEYSUPERMARKET and Amazon 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 Amazon Inc are associated (or correlated) with MONEYSUPERMARKET. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MONEYSUPERMARKET has no effect on the direction of Amazon i.e., Amazon and MONEYSUPERMARKET go up and down completely randomly.
Pair Corralation between Amazon and MONEYSUPERMARKET
Assuming the 90 days trading horizon Amazon Inc is expected to generate 0.87 times more return on investment than MONEYSUPERMARKET. However, Amazon Inc is 1.15 times less risky than MONEYSUPERMARKET. It trades about 0.22 of its potential returns per unit of risk. MONEYSUPERMARKET is currently generating about -0.07 per unit of risk. If you would invest 15,674 in Amazon Inc on August 29, 2024 and sell it today you would earn a total of 3,980 from holding Amazon Inc or generate 25.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Amazon Inc vs. MONEYSUPERMARKET
Performance |
| Timeline |
| Amazon Inc |
| MONEYSUPERMARKET |
Amazon and MONEYSUPERMARKET Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Amazon and MONEYSUPERMARKET
The main advantage of trading using opposite Amazon and MONEYSUPERMARKET positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amazon position performs unexpectedly, MONEYSUPERMARKET 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 MONEYSUPERMARKET will offset losses from the drop in MONEYSUPERMARKET's long position.| Amazon vs. Gladstone Investment | Amazon vs. REINET INVESTMENTS SCA | Amazon vs. SLR Investment Corp | Amazon vs. HK Electric Investments |
| MONEYSUPERMARKET vs. Apple Inc | MONEYSUPERMARKET vs. Apple Inc | MONEYSUPERMARKET vs. Superior Plus Corp | MONEYSUPERMARKET vs. SIVERS SEMICONDUCTORS AB |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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