Correlation Between Yum Brands and Amazon

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

Diversification Opportunities for Yum Brands and Amazon

-0.73
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between Yum Brands and Amazon is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding Yum Brands and Amazon Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amazon Inc and Yum Brands 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 Yum Brands 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 Yum Brands i.e., Yum Brands and Amazon go up and down completely randomly.

Pair Corralation between Yum Brands and Amazon

Considering the 90-day investment horizon Yum Brands is expected to generate 0.52 times more return on investment than Amazon. However, Yum Brands is 1.91 times less risky than Amazon. It trades about 0.03 of its potential returns per unit of risk. Amazon Inc is currently generating about -0.04 per unit of risk. If you would invest  11,566  in Yum Brands on September 10, 2022 and sell it today you would earn a total of  1,419  from holding Yum Brands or generate 12.27% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

Yum Brands  vs.  Amazon Inc

 Performance (%) 
       Timeline  
Yum Brands 
Yum Brands Performance
8 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Yum Brands are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Yum Brands may actually be approaching a critical reversion point that can send shares even higher in January 2023.

Yum Brands 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 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

Yum Brands and Amazon Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Yum Brands and Amazon

The main advantage of trading using opposite Yum Brands and Amazon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Yum Brands 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.
Yum Brands vs. Walt Disney
Yum Brands vs. Cisco Systems
Yum Brands vs. 3M Company
Yum Brands vs. Pfizer Inc
The idea behind Yum Brands 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. Best Buy Co
Amazon vs. Cisco Systems
Amazon vs. Johnson Johnson
Amazon vs. The Boeing
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 ETF Directory module to find actively traded Exchange Traded Funds (ETF) from around the world.

Other Complementary Tools

Aroon Oscillator
Analyze current equity momentum using Aroon Oscillator and other momentum ratios
Go
Technical Analysis
Check basic technical indicators and analysis based on most latest market data
Go
Competition Analyzer
Analyze and compare many basic indicators for a group of related or unrelated entities
Go
Portfolio Volatility
Check portfolio volatility and analyze historical return density to properly model market risk
Go
Idea Breakdown
Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes
Go
Equity Forecasting
Use basic forecasting models to generate price predictions and determine price momentum
Go
Money Flow Index
Determine momentum by analyzing Money Flow Index and other technical indicators
Go
Earnings Calls
Check upcoming earnings announcements updated hourly across public exchanges
Go
Portfolio Backtesting
Avoid under-diversification and over-optimization by backtesting your portfolios
Go
Stock Screener
Find equities using custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook.
Go
Insider Screener
Find insiders across different sectors to evaluate their impact on performance
Go
Equity Valuation
Check real value of public entities based on technical and fundamental data
Go
Positions Ratings
Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance
Go