Correlation Between Apple and Amazon

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Apple 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 Apple and Amazon into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Apple Inc and Amazon Inc, you can compare the effects of market volatilities on Apple 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 Apple with a short position of Amazon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Apple and Amazon.

Diversification Opportunities for Apple and Amazon

0.94
  Correlation Coefficient

Almost no diversification

The 3 months correlation between Apple and Amazon is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Apple Inc and Amazon Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amazon Inc and Apple 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 Apple Inc 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 Apple i.e., Apple and Amazon go up and down completely randomly.

Pair Corralation between Apple and Amazon

Given the investment horizon of 90 days Apple Inc is expected to generate 0.65 times more return on investment than Amazon. However, Apple Inc is 1.54 times less risky than Amazon. It trades about -0.02 of its potential returns per unit of risk. Amazon Inc is currently generating about -0.03 per unit of risk. If you would invest  16,963  in Apple Inc on June 27, 2022 and sell it today you would lose (1,920)  from holding Apple Inc or give up 11.32% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Strong
Accuracy100.0%
ValuesDaily Returns

Apple Inc  vs.  Amazon Inc

 Performance (%) 
       Timeline  
Apple Inc 
Apple Performance
4 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Apple Inc are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Even with relatively unsteady basic indicators, Apple may actually be approaching a critical reversion point that can send shares even higher in October 2022.

Apple Price Channel

Amazon Inc 
Amazon Performance
1 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Amazon Inc are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent basic indicators, Amazon is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Amazon Price Channel

Apple and Amazon Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Apple and Amazon

The main advantage of trading using opposite Apple and Amazon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Apple 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.
Apple vs. BUSHVELD MINERALS LTD
The idea behind Apple Inc and Amazon Inc 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.
Amazon vs. BUSHVELD MINERALS LTD
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 Commodity Channel Index module to use Commodity Channel Index to analyze current equity momentum.

Other Complementary Tools

Financial Widgets
Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets
Go
Portfolio Anywhere
Track or share privately all of your investments from the convenience of any device
Go
Money Flow Index
Determine momentum by analyzing Money Flow Index and other technical indicators
Go
Aroon Oscillator
Analyze current equity momentum using Aroon Oscillator and other momentum ratios
Go
Financial Widgets
Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets
Go
Crypto Correlations
Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins
Go
Global Markets Map
Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes
Go
Portfolio Diagnostics
Use generated alerts and portfolio events aggregator to diagnose current holdings
Go