Correlation Between Nvidia Corp and Amazon

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

Diversification Opportunities for Nvidia Corp and Amazon

-0.15
  Correlation Coefficient

Good diversification

The 3 months correlation between Nvidia and Amazon is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Nvidia Corp and Amazon Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amazon Inc and Nvidia Corp 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 Nvidia Corp 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 Nvidia Corp i.e., Nvidia Corp and Amazon go up and down completely randomly.

Pair Corralation between Nvidia Corp and Amazon

Given the investment horizon of 90 days Nvidia Corp is expected to generate 1.36 times more return on investment than Amazon. However, Nvidia Corp is 1.36 times more volatile than Amazon Inc. It trades about 0.04 of its potential returns per unit of risk. Amazon Inc is currently generating about -0.03 per unit of risk. If you would invest  11,575  in Nvidia Corp on August 28, 2022 and sell it today you would earn a total of  4,695  from holding Nvidia Corp or generate 40.56% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy99.77%
ValuesDaily Returns

Nvidia Corp  vs.  Amazon Inc

 Performance (%) 
       Timeline  
Nvidia Corp 
Nvidia Performance
2 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Nvidia Corp are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat abnormal fundamental indicators, Nvidia Corp may actually be approaching a critical reversion point that can send shares even higher in December 2022.

Nvidia Price Channel

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 conflicting performance in the last few months, the Stock's basic indicators remain quite persistent which may send shares a bit higher in December 2022. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Amazon Price Channel

Nvidia Corp and Amazon Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Nvidia Corp and Amazon

The main advantage of trading using opposite Nvidia Corp and Amazon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nvidia Corp 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.
Nvidia Corp vs. Arrow Electronics
Nvidia Corp vs. Avnet Inc
Nvidia Corp vs. Flextronics Intl
The idea behind Nvidia Corp 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. Groupon Cl A
Amazon vs. Aarons Holdings
Amazon vs. American Eagle Outfitters
Amazon vs. Abercrombie Fitch
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.

Other Complementary Tools

Volatility Analysis
Get historical volatility and risk analysis based on latest market data
Go
Insider Screener
Find insiders across different sectors to evaluate their impact on performance
Go
Equity Analysis
Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities
Go
Analyst Recommendations
Analyst recommendations and target price estimates broken down by several categories
Go
Options Analysis
Analyze and evaluate options and option chains as a potential hedge for your portfolios
Go
Analyst Recommendations
Analyst recommendations and target price estimates broken down by several categories
Go
Fundamentals Comparison
Compare fundamentals across multiple equities to find investing opportunities
Go
Options Analysis
Analyze and evaluate options and option chains as a potential hedge for your portfolios
Go
Options Analysis
Analyze and evaluate options and option chains as a potential hedge for your portfolios
Go
Alpha Finder
Use alpha and beta coefficients to find investment opportunities after accounting for the risk
Go