Correlation Between Amazon and Amplifon SpA
Can any of the company-specific risk be diversified away by investing in both Amazon and Amplifon SpA 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 Amplifon SpA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Amazon Inc and Amplifon SpA, you can compare the effects of market volatilities on Amazon and Amplifon SpA 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 Amplifon SpA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amazon and Amplifon SpA.
Diversification Opportunities for Amazon and Amplifon SpA
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Amazon and Amplifon is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Amazon Inc and Amplifon SpA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amplifon SpA 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 Amplifon SpA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amplifon SpA has no effect on the direction of Amazon i.e., Amazon and Amplifon SpA go up and down completely randomly.
Pair Corralation between Amazon and Amplifon SpA
If you would invest 19,578 in Amazon Inc on September 3, 2024 and sell it today you would earn a total of 1,211 from holding Amazon Inc or generate 6.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 5.0% |
| Values | Daily Returns |
Amazon Inc vs. Amplifon SpA
Performance |
| Timeline |
| Amazon Inc |
| Amplifon SpA |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Amazon and Amplifon SpA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Amazon and Amplifon SpA
The main advantage of trading using opposite Amazon and Amplifon SpA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amazon position performs unexpectedly, Amplifon SpA 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 Amplifon SpA will offset losses from the drop in Amplifon SpA's long position.The idea behind Amazon Inc and Amplifon SpA pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Amplifon SpA vs. Sonida Senior Living | Amplifon SpA vs. Cumberland Pharmaceuticals | Amplifon SpA vs. Aquestive Therapeutics | Amplifon SpA vs. Cardinal Health |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
Other Complementary Tools
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios |