Correlation Between Getty Images and Amazon
Can any of the company-specific risk be diversified away by investing in both Getty Images and Amazon 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 Getty Images and Amazon into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Getty Images Holdings and Amazon Inc, you can compare the effects of market volatilities on Getty Images and Amazon 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 Getty Images with a short position of Amazon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Getty Images and Amazon.
Diversification Opportunities for Getty Images and Amazon
-0.73 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Getty and Amazon is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding Getty Images Holdings and Amazon Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amazon Inc and Getty Images 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 Getty Images Holdings are associated (or correlated) with Amazon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amazon Inc has no effect on the direction of Getty Images i.e., Getty Images and Amazon go up and down completely randomly.
Pair Corralation between Getty Images and Amazon
Given the investment horizon of 90 days Getty Images Holdings is expected to under-perform the Amazon. In addition to that, Getty Images is 1.58 times more volatile than Amazon Inc. It trades about -0.23 of its total potential returns per unit of risk. Amazon Inc is currently generating about 0.43 per unit of volatility. If you would invest 20,170 in Amazon Inc on September 19, 2024 and sell it today you would earn a total of 2,945 from holding Amazon Inc or generate 14.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Getty Images Holdings vs. Amazon Inc
Performance |
| Timeline |
| Getty Images Holdings |
| Amazon Inc |
Getty Images and Amazon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Getty Images and Amazon
The main advantage of trading using opposite Getty Images and Amazon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Getty Images position performs unexpectedly, Amazon 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 Amazon will offset losses from the drop in Amazon's long position.| Getty Images vs. Twilio Inc | Getty Images vs. Baidu Inc | Getty Images vs. Snap Inc | Getty Images vs. ANGI Homeservices |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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