Correlation Between Amazon and EDINBURGH INVESTMENT

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

Diversification Opportunities for Amazon and EDINBURGH INVESTMENT

  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between Amazon and EDINBURGH is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Amazon Inc and EDINBURGH INVESTMENT TRUST PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EDINBURGH INVESTMENT 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 EDINBURGH INVESTMENT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EDINBURGH INVESTMENT has no effect on the direction of Amazon i.e., Amazon and EDINBURGH INVESTMENT go up and down completely randomly.

Pair Corralation between Amazon and EDINBURGH INVESTMENT

If you would invest (100.00)  in EDINBURGH INVESTMENT TRUST on July 5, 2022 and sell it today you would earn a total of  100.00  from holding EDINBURGH INVESTMENT TRUST or generate -100.0% return on investment over 90 days.
Time Period3 Months [change]
ValuesDaily Returns


 Performance (%) 
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 quite persistent basic indicators, Amazon is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

Amazon Price Channel

EDINBURGH Performance
0 of 100
Over the last 90 days EDINBURGH INVESTMENT TRUST has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively steady basic indicators, EDINBURGH INVESTMENT is not utilizing all of its potentials. The new stock price chaos, may contribute to medium-term losses for the stakeholders.

Amazon and EDINBURGH INVESTMENT Volatility Contrast

   Predicted Return Density   

Pair Trading with Amazon and EDINBURGH INVESTMENT

The main advantage of trading using opposite Amazon and EDINBURGH INVESTMENT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amazon position performs unexpectedly, EDINBURGH INVESTMENT 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 EDINBURGH INVESTMENT will offset losses from the drop in EDINBURGH INVESTMENT's long position.
The idea behind Amazon Inc and EDINBURGH INVESTMENT TRUST 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.
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.

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