Correlation Between Amazon and Major Precious
Can any of the company-specific risk be diversified away by investing in both Amazon and Major Precious 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 Major Precious into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Amazon Inc and Major Precious Metals, you can compare the effects of market volatilities on Amazon and Major Precious 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 Major Precious. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amazon and Major Precious.
Diversification Opportunities for Amazon and Major Precious
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Amazon and Major is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Amazon Inc and Major Precious Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Major Precious Metals 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 Major Precious. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Major Precious Metals has no effect on the direction of Amazon i.e., Amazon and Major Precious go up and down completely randomly.
Pair Corralation between Amazon and Major Precious
If you would invest 20,684 in Amazon Inc on September 12, 2024 and sell it today you would earn a total of 1,820 from holding Amazon Inc or generate 8.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 4.76% |
| Values | Daily Returns |
Amazon Inc vs. Major Precious Metals
Performance |
| Timeline |
| Amazon Inc |
| Major Precious Metals |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Amazon and Major Precious Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Amazon and Major Precious
The main advantage of trading using opposite Amazon and Major Precious positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amazon position performs unexpectedly, Major Precious 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 Major Precious will offset losses from the drop in Major Precious' long position.The idea behind Amazon Inc and Major Precious Metals 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.| Major Precious vs. Lithium Americas Corp | Major Precious vs. Sigma Lithium Resources | Major Precious vs. Standard Lithium | Major Precious vs. Sayona Mining Limited |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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