Correlation Between Amazon and Global Cord

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

Diversification Opportunities for Amazon and Global Cord

-0.64
  Correlation Coefficient

Excellent diversification

The 3 months correlation between Amazon and Global is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Amazon Inc and Global Cord Blood in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Cord Blood 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 Global Cord. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Cord Blood has no effect on the direction of Amazon i.e., Amazon and Global Cord go up and down completely randomly.

Pair Corralation between Amazon and Global Cord

If you would invest  299.00  in Global Cord Blood on September 8, 2022 and sell it today you would earn a total of  0.00  from holding Global Cord Blood or generate 0.0% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

Amazon Inc  vs.  Global Cord Blood

 Performance (%) 
       Timeline  
Amazon Inc 
Amazon Performance
0 of 100
Over the last 90 days Amazon Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain quite persistent which may send shares a bit higher in January 2023. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Amazon Price Channel

Global Cord Blood 
Global Performance
9 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Global Cord Blood are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite quite unsteady basic indicators, Global Cord disclosed solid returns over the last few months and may actually be approaching a breakup point.

Global Price Channel

Amazon and Global Cord Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Amazon and Global Cord

The main advantage of trading using opposite Amazon and Global Cord positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amazon position performs unexpectedly, Global Cord 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 Global Cord will offset losses from the drop in Global Cord's long position.
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The idea behind Amazon Inc and Global Cord Blood 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.
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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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..

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