Correlation Between Amazon and Ishares Us
Can any of the company-specific risk be diversified away by investing in both Amazon and Ishares Us 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 Ishares Us into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Amazon Inc and Ishares Aggregate Bond, you can compare the effects of market volatilities on Amazon and Ishares Us 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 Ishares Us. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amazon and Ishares Us.
Diversification Opportunities for Amazon and Ishares Us
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Amazon and Ishares is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Amazon Inc and Ishares Aggregate Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ishares Aggregate Bond 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 Ishares Us. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ishares Aggregate Bond has no effect on the direction of Amazon i.e., Amazon and Ishares Us go up and down completely randomly.
Pair Corralation between Amazon and Ishares Us
Given the investment horizon of 90 days Amazon Inc is expected to generate 4.74 times more return on investment than Ishares Us. However, Amazon is 4.74 times more volatile than Ishares Aggregate Bond. It trades about 0.1 of its potential returns per unit of risk. Ishares Aggregate Bond is currently generating about 0.06 per unit of risk. If you would invest 14,589 in Amazon Inc on September 4, 2024 and sell it today you would earn a total of 6,755 from holding Amazon Inc or generate 46.3% 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. Ishares Aggregate Bond
Performance |
| Timeline |
| Amazon Inc |
| Ishares Aggregate Bond |
Amazon and Ishares Us Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Amazon and Ishares Us
The main advantage of trading using opposite Amazon and Ishares Us positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amazon position performs unexpectedly, Ishares Us 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 Ishares Us will offset losses from the drop in Ishares Us' long position.The idea behind Amazon Inc and Ishares Aggregate Bond 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.| Ishares Us vs. Materials Portfolio Fidelity | Ishares Us vs. Fabxx | Ishares Us vs. Falcon Focus Scv | Ishares Us vs. Abr 7525 Volatility |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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