Correlation Between Amazon and 1847 Goedeker

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Can any of the company-specific risk be diversified away by investing in both Amazon and 1847 Goedeker 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 1847 Goedeker into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Amazon Inc and 1847 Goedeker Inc, you can compare the effects of market volatilities on Amazon and 1847 Goedeker 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 1847 Goedeker. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amazon and 1847 Goedeker.

Diversification Opportunities for Amazon and 1847 Goedeker

-0.17
  Correlation Coefficient

Good diversification

The 3 months correlation between Amazon and 1847 Goedeker is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Amazon Inc and 1847 Goedeker Inc Commom Stock in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on 1847 Goedeker Commom 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 1847 Goedeker. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of 1847 Goedeker Commom has no effect on the direction of Amazon i.e., Amazon and 1847 Goedeker go up and down completely randomly.

Pair Corralation between Amazon and 1847 Goedeker

Given the investment horizon of 90 days Amazon Inc is expected to generate 0.91 times more return on investment than 1847 Goedeker. However, Amazon Inc is 1.1 times less risky than 1847 Goedeker. It trades about 0.26 of its potential returns per unit of risk. 1847 Goedeker Inc is currently generating about 0.01 per unit of risk. If you would invest  10,367  in Amazon Inc on May 14, 2022 and sell it today you would earn a total of  3,931  from holding Amazon Inc or generate 37.92% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy97.67%
ValuesDaily Returns

Amazon Inc  vs.  1847 Goedeker Inc Commom Stock

 Performance (%) 
       Timeline  
Amazon Inc 
Amazon Performance
10 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Amazon Inc are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite quite weak basic indicators, Amazon disclosed solid returns over the last few months and may actually be approaching a breakup point.

Amazon Price Channel

1847 Goedeker Commom 
1847 Goedeker Performance
0 of 100
Over the last 90 days 1847 Goedeker Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's technical and fundamental indicators remain rather sound which may send shares a bit higher in September 2022. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

1847 Goedeker Price Channel

Amazon and 1847 Goedeker Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Amazon and 1847 Goedeker

The main advantage of trading using opposite Amazon and 1847 Goedeker positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amazon position performs unexpectedly, 1847 Goedeker 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 1847 Goedeker will offset losses from the drop in 1847 Goedeker's long position.
The idea behind Amazon Inc and 1847 Goedeker 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.

1847 Goedeker Inc

Pair trading matchups for 1847 Goedeker

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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.

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