Correlation Between Amazon and SUNCOKE ENERGY
Can any of the company-specific risk be diversified away by investing in both Amazon and SUNCOKE ENERGY 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 SUNCOKE ENERGY into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Amazon Inc and SUNCOKE ENERGY, you can compare the effects of market volatilities on Amazon and SUNCOKE ENERGY 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 SUNCOKE ENERGY. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amazon and SUNCOKE ENERGY.
Diversification Opportunities for Amazon and SUNCOKE ENERGY
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Amazon and SUNCOKE is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Amazon Inc and SUNCOKE ENERGY in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SUNCOKE ENERGY 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 SUNCOKE ENERGY. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SUNCOKE ENERGY has no effect on the direction of Amazon i.e., Amazon and SUNCOKE ENERGY go up and down completely randomly.
Pair Corralation between Amazon and SUNCOKE ENERGY
Assuming the 90 days trading horizon Amazon Inc is expected to generate 0.63 times more return on investment than SUNCOKE ENERGY. However, Amazon Inc is 1.58 times less risky than SUNCOKE ENERGY. It trades about 0.11 of its potential returns per unit of risk. SUNCOKE ENERGY is currently generating about 0.06 per unit of risk. If you would invest 13,946 in Amazon Inc on September 12, 2024 and sell it today you would earn a total of 7,719 from holding Amazon Inc or generate 55.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Amazon Inc vs. SUNCOKE ENERGY
Performance |
| Timeline |
| Amazon Inc |
| SUNCOKE ENERGY |
Amazon and SUNCOKE ENERGY Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Amazon and SUNCOKE ENERGY
The main advantage of trading using opposite Amazon and SUNCOKE ENERGY positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amazon position performs unexpectedly, SUNCOKE ENERGY 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 SUNCOKE ENERGY will offset losses from the drop in SUNCOKE ENERGY's long position.| Amazon vs. Verizon Communications | Amazon vs. INTERSHOP Communications Aktiengesellschaft | Amazon vs. Singapore Telecommunications Limited | Amazon vs. MTI WIRELESS EDGE |
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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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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