Correlation Between Amazon and JDS UNIPHASE
Can any of the company-specific risk be diversified away by investing in both Amazon and JDS UNIPHASE 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 JDS UNIPHASE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Amazon Inc and JDS UNIPHASE, you can compare the effects of market volatilities on Amazon and JDS UNIPHASE 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 JDS UNIPHASE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amazon and JDS UNIPHASE.
Diversification Opportunities for Amazon and JDS UNIPHASE
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Amazon and JDS is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Amazon Inc and JDS UNIPHASE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JDS UNIPHASE 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 JDS UNIPHASE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JDS UNIPHASE has no effect on the direction of Amazon i.e., Amazon and JDS UNIPHASE go up and down completely randomly.
Pair Corralation between Amazon and JDS UNIPHASE
Assuming the 90 days trading horizon Amazon Inc is expected to generate 0.84 times more return on investment than JDS UNIPHASE. However, Amazon Inc is 1.19 times less risky than JDS UNIPHASE. It trades about 0.12 of its potential returns per unit of risk. JDS UNIPHASE is currently generating about 0.01 per unit of risk. If you would invest 7,835 in Amazon Inc on September 12, 2024 and sell it today you would earn a total of 13,830 from holding Amazon Inc or generate 176.52% 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. JDS UNIPHASE
Performance |
| Timeline |
| Amazon Inc |
| JDS UNIPHASE |
Amazon and JDS UNIPHASE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Amazon and JDS UNIPHASE
The main advantage of trading using opposite Amazon and JDS UNIPHASE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amazon position performs unexpectedly, JDS UNIPHASE 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 JDS UNIPHASE will offset losses from the drop in JDS UNIPHASE's long position.| Amazon vs. Verizon Communications | Amazon vs. INTERSHOP Communications Aktiengesellschaft | Amazon vs. Singapore Telecommunications Limited | Amazon vs. MTI WIRELESS EDGE |
| JDS UNIPHASE vs. Zijin Mining Group | JDS UNIPHASE vs. Ross Stores | JDS UNIPHASE vs. AEON STORES | JDS UNIPHASE vs. KENNAMETAL INC |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
Other Complementary Tools
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| CEOs Directory Screen CEOs from public companies around the world | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets |