Correlation Between Amazon and IShares MSCI
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By analyzing existing cross correlation between Amazon Inc and iShares MSCI ACWI, you can compare the effects of market volatilities on Amazon and IShares MSCI 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 MSCI. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amazon and IShares MSCI.
Diversification Opportunities for Amazon and IShares MSCI
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Amazon and IShares is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Amazon Inc and iShares MSCI ACWI in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares MSCI ACWI 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 MSCI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares MSCI ACWI has no effect on the direction of Amazon i.e., Amazon and IShares MSCI go up and down completely randomly.
Pair Corralation between Amazon and IShares MSCI
Given the investment horizon of 90 days Amazon Inc is expected to generate 2.25 times more return on investment than IShares MSCI. However, Amazon is 2.25 times more volatile than iShares MSCI ACWI. It trades about 0.1 of its potential returns per unit of risk. iShares MSCI ACWI is currently generating about 0.13 per unit of risk. If you would invest 9,158 in Amazon Inc on September 4, 2024 and sell it today you would earn a total of 12,186 from holding Amazon Inc or generate 133.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 77.98% |
| Values | Daily Returns |
Amazon Inc vs. iShares MSCI ACWI
Performance |
| Timeline |
| Amazon Inc |
| iShares MSCI ACWI |
Amazon and IShares MSCI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Amazon and IShares MSCI
The main advantage of trading using opposite Amazon and IShares MSCI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amazon position performs unexpectedly, IShares MSCI 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 MSCI will offset losses from the drop in IShares MSCI's long position.The idea behind Amazon Inc and iShares MSCI ACWI 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 MSCI vs. Brainsway | IShares MSCI vs. Mivne Real Estate | IShares MSCI vs. Photomyne | IShares MSCI vs. Israel Land Development |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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