Correlation Between SVB Financial and Amazon
Can any of the company-specific risk be diversified away by investing in both SVB Financial 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 SVB Financial and Amazon into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SVB Financial Group and Amazon Inc, you can compare the effects of market volatilities on SVB Financial 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 SVB Financial with a short position of Amazon. Check out your portfolio center. Please also check ongoing floating volatility patterns of SVB Financial and Amazon.
Diversification Opportunities for SVB Financial and Amazon
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between SVB and Amazon is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding SVB Financial Group and Amazon Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amazon Inc and SVB Financial 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 SVB Financial Group 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 SVB Financial i.e., SVB Financial and Amazon go up and down completely randomly.
Pair Corralation between SVB Financial and Amazon
Assuming the 90 days trading horizon SVB Financial Group is expected to under-perform the Amazon. In addition to that, SVB Financial is 1.45 times more volatile than Amazon Inc. It trades about -0.05 of its total potential returns per unit of risk. Amazon Inc is currently generating about 0.1 per unit of volatility. If you would invest 2,464 in Amazon Inc on September 3, 2024 and sell it today you would earn a total of 3,789 from holding Amazon Inc or generate 153.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 99.0% |
| Values | Daily Returns |
SVB Financial Group vs. Amazon Inc
Performance |
| Timeline |
| SVB Financial Group |
| Amazon Inc |
SVB Financial and Amazon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SVB Financial and Amazon
The main advantage of trading using opposite SVB Financial and Amazon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SVB Financial 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.| SVB Financial vs. Ita Unibanco Holding | SVB Financial vs. Ita Unibanco Holding | SVB Financial vs. Deutsche Bank Aktiengesellschaft | SVB Financial vs. Banco Bradesco SA |
| Amazon vs. Bank of America | Amazon vs. Lloyds Banking Group | Amazon vs. SVB Financial Group | Amazon vs. Unifique Telecomunicaes SA |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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