Correlation Between Amazon and PACIFIC
Specify exactly 2 symbols:
By analyzing existing cross correlation between Amazon Inc and PACIFIC GAS ELECTRIC, you can compare the effects of market volatilities on Amazon and PACIFIC 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 PACIFIC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amazon and PACIFIC.
Diversification Opportunities for Amazon and PACIFIC
Excellent diversification
The 3 months correlation between Amazon and PACIFIC is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Amazon Inc and PACIFIC GAS ELECTRIC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PACIFIC GAS ELECTRIC 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 PACIFIC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PACIFIC GAS ELECTRIC has no effect on the direction of Amazon i.e., Amazon and PACIFIC go up and down completely randomly.
Pair Corralation between Amazon and PACIFIC
Given the investment horizon of 90 days Amazon Inc is expected to generate 1.53 times more return on investment than PACIFIC. However, Amazon is 1.53 times more volatile than PACIFIC GAS ELECTRIC. It trades about 0.19 of its potential returns per unit of risk. PACIFIC GAS ELECTRIC is currently generating about -0.08 per unit of risk. If you would invest 19,578 in Amazon Inc on September 4, 2024 and sell it today you would earn a total of 1,493 from holding Amazon Inc or generate 7.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
Amazon Inc vs. PACIFIC GAS ELECTRIC
Performance |
| Timeline |
| Amazon Inc |
| PACIFIC GAS ELECTRIC |
Amazon and PACIFIC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Amazon and PACIFIC
The main advantage of trading using opposite Amazon and PACIFIC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amazon position performs unexpectedly, PACIFIC 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 PACIFIC will offset losses from the drop in PACIFIC's long position.The idea behind Amazon Inc and PACIFIC GAS ELECTRIC 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.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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
Other Complementary Tools
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume |