Correlation Between Amazon and IShares Core
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By analyzing existing cross correlation between Amazon Inc and iShares Core SP, you can compare the effects of market volatilities on Amazon and IShares Core 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 Core. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amazon and IShares Core.
Diversification Opportunities for Amazon and IShares Core
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Amazon and IShares is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Amazon Inc and iShares Core SP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares Core SP 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 Core. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares Core SP has no effect on the direction of Amazon i.e., Amazon and IShares Core go up and down completely randomly.
Pair Corralation between Amazon and IShares Core
Given the investment horizon of 90 days Amazon Inc is expected to generate 2.14 times more return on investment than IShares Core. However, Amazon is 2.14 times more volatile than iShares Core SP. It trades about 0.1 of its potential returns per unit of risk. iShares Core SP is currently generating about 0.15 per unit of risk. If you would invest 8,845 in Amazon Inc on September 5, 2024 and sell it today you would earn a total of 12,499 from holding Amazon Inc or generate 141.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 77.98% |
| Values | Daily Returns |
Amazon Inc vs. iShares Core SP
Performance |
| Timeline |
| Amazon Inc |
| iShares Core SP |
Amazon and IShares Core Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Amazon and IShares Core
The main advantage of trading using opposite Amazon and IShares Core positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amazon position performs unexpectedly, IShares Core 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 Core will offset losses from the drop in IShares Core's long position.The idea behind Amazon Inc and iShares Core SP 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 Core vs. iShares SP 500 | IShares Core vs. iShares MSCI ACWI | IShares Core vs. iShares NASDAQ 100 | IShares Core vs. iShares Healthcare Innovation |
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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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