Correlation Between Amazon and EVRAZ Plc

Can any of the company-specific risk be diversified away by investing in both Amazon and EVRAZ Plc 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 EVRAZ Plc into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Amazon Inc and EVRAZ Plc, you can compare the effects of market volatilities on Amazon and EVRAZ Plc 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 EVRAZ Plc. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amazon and EVRAZ Plc.

Diversification Opportunities for Amazon and EVRAZ Plc

0.0

Correlation Coefficient

Amazon  EVRAZ Plc

Pay attention - limited upside

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

Pair Corralation between Amazon and EVRAZ Plc

If you would invest  15,912  in Amazon Inc on January 26, 2024 and sell it today you would earn a total of  1,747  from holding Amazon Inc or generate 10.98% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	1.61%
Values	Daily Returns

Amazon Inc  vs.  EVRAZ Plc

Amazon Inc

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Amazon Inc are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of very unsteady basic indicators, Amazon may actually be approaching a critical reversion point that can send shares even higher in May 2024.

EVRAZ Plc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days EVRAZ Plc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, EVRAZ Plc is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Amazon and EVRAZ Plc

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

The idea behind Amazon Inc and EVRAZ Plc 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 the Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.