Correlation Between Amazon and Kering SA
Can any of the company-specific risk be diversified away by investing in both Amazon and Kering SA 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 Kering SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Amazon Inc and Kering SA, you can compare the effects of market volatilities on Amazon and Kering SA 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 Kering SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amazon and Kering SA.
Diversification Opportunities for Amazon and Kering SA
Excellent diversification
The 3 months correlation between Amazon and Kering is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding Amazon Inc and Kering SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kering SA 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 Kering SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kering SA has no effect on the direction of Amazon i.e., Amazon and Kering SA go up and down completely randomly.
Pair Corralation between Amazon and Kering SA
Assuming the 90 days trading horizon Amazon Inc is expected to generate 0.82 times more return on investment than Kering SA. However, Amazon Inc is 1.22 times less risky than Kering SA. It trades about 0.16 of its potential returns per unit of risk. Kering SA is currently generating about -0.05 per unit of risk. If you would invest 18,260 in Amazon Inc on September 2, 2024 and sell it today you would earn a total of 1,280 from holding Amazon Inc or generate 7.01% 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. Kering SA
Performance |
| Timeline |
| Amazon Inc |
| Kering SA |
Amazon and Kering SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Amazon and Kering SA
The main advantage of trading using opposite Amazon and Kering SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amazon position performs unexpectedly, Kering SA 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 Kering SA will offset losses from the drop in Kering SA's long position.| Amazon vs. Richardson Electronics | Amazon vs. Mobilezone Holding AG | Amazon vs. METHODE ELECTRONICS | Amazon vs. Arrow Electronics |
| Kering SA vs. National Retail Properties | Kering SA vs. Caseys General Stores | Kering SA vs. British American Tobacco | Kering SA vs. NAKED WINES PLC |
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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
Other Complementary Tools
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Global Correlations Find global opportunities by holding instruments from different markets |