Correlation Between Gores Holdings and Amazon

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

Diversification Opportunities for Gores Holdings and Amazon

0.0
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between Gores and Amazon is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Gores Holdings VII and Amazon Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amazon Inc and Gores Holdings 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 Gores Holdings VII 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 Gores Holdings i.e., Gores Holdings and Amazon go up and down completely randomly.

Pair Corralation between Gores Holdings and Amazon

If you would invest  9,098  in Amazon Inc on September 5, 2022 and sell it today you would earn a total of  315.00  from holding Amazon Inc or generate 3.46% return on investment over 90 days.
Time Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy4.76%
ValuesDaily Returns

Gores Holdings VII  vs.  Amazon Inc

 Performance (%) 
       Timeline  
Gores Holdings VII 
Gores Performance
0 of 100
Over the last 90 days Gores Holdings VII has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable technical and fundamental indicators, Gores Holdings is not utilizing all of its potentials. The current stock price fuss, may contribute to near-short-term losses for the sophisticated investors.
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

Gores Holdings and Amazon Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Gores Holdings and Amazon

The main advantage of trading using opposite Gores Holdings and Amazon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gores Holdings 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.
The effect of pair diversification on risk is to reduce it, but we should note this doesn't apply to all risk types. When we trade pairs against Gores Holdings as a counterpart, there is always some inherent risk that will never be diversified away no matter what. This volatility limits the effect of tactical diversification using pair trading. Gores Holdings' systematic risk is the inherent uncertainty of the entire market, and therefore cannot be mitigated even by pair-trading it against the equity that is not highly correlated to it. On the other hand, Gores Holdings' unsystematic risk describes the types of risk that we can protect against, at least to some degree, by selecting a matching pair that is not perfectly correlated to Gores Holdings VII.
The idea behind Gores Holdings VII 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. Carvana Co
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 Anywhere module to track or share privately all of your investments from the convenience of any device.

Other Complementary Tools

Performance Analysis
Check effects of mean-variance optimization against your current asset allocation
Go
Price Exposure Probability
Analyze equity upside and downside potential for a given time horizon across multiple markets
Go
Pair Correlation
Compare performance and examine fundamental relationship between any two equity instruments
Go
Content Syndication
Quickly integrate customizable finance content to your own investment portal
Go
Portfolio Comparator
Compare the composition, asset allocations and performance of any two portfolios in your account
Go
Equity Forecasting
Use basic forecasting models to generate price predictions and determine price momentum
Go
Probability Of Bankruptcy
Get analysis of equity chance of financial distress in the next 2 years
Go
Global Correlations
Find global opportunities by holding instruments from different markets
Go
Probability Of Bankruptcy
Get analysis of equity chance of financial distress in the next 2 years
Go