Correlation Between Amazon and LPL Financial

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

Diversification Opportunities for Amazon and LPL Financial

-0.65
  Correlation Coefficient

Excellent diversification

The 1 month correlation between Amazon and LPL Financial is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Amazon Inc and LPL Financial Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LPL Financial Holdings 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 LPL Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LPL Financial Holdings has no effect on the direction of Amazon i.e., Amazon and LPL Financial go up and down completely randomly.

Pair Corralation between Amazon and LPL Financial

Given the investment horizon of 90 days Amazon Inc is expected to under-perform the LPL Financial. In addition to that, Amazon is 1.21 times more volatile than LPL Financial Holdings. It trades about -0.06 of its total potential returns per unit of risk. LPL Financial Holdings is currently generating about 0.07 per unit of volatility. If you would invest  15,949  in LPL Financial Holdings on September 6, 2022 and sell it today you would earn a total of  7,622  from holding LPL Financial Holdings or generate 47.79% return on investment over 90 days.
Time Period1 Month [change]
DirectionMoves Against 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

Amazon Inc  vs.  LPL Financial Holdings

 Performance (%) 
       Timeline  
Amazon Inc 
Amazon Performance
5 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Amazon Inc are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite quite weak basic indicators, Amazon disclosed solid returns over the last few months and may actually be approaching a breakup point.

Amazon Price Channel

LPL Financial Holdings 
LPL Financial Performance
0 of 100
Over the last 90 days LPL Financial Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unsteady performance in the last few months, the Stock's essential indicators remain somewhat strong which may send shares a bit higher in January 2023. The current disturbance may also be a sign of long term up-swing for the company investors.

LPL Financial Price Channel

Amazon and LPL Financial Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Amazon and LPL Financial

The main advantage of trading using opposite Amazon and LPL Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amazon position performs unexpectedly, LPL Financial 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 LPL Financial will offset losses from the drop in LPL Financial's long position.
Amazon vs. Carvana Co
The idea behind Amazon Inc and LPL Financial Holdings 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.
LPL Financial vs. Affiliated Managers Group
LPL Financial vs. Great Ajax Corp
LPL Financial vs. Arbor Realty Trust
LPL Financial vs. Ashford
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 Transaction History module to view history of all your transactions and understand their impact on performance.

Other Complementary Tools

Fund Screener
Find actively-traded funds from around the world traded on over 30 global exchanges
Go
Companies Directory
Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals
Go
Crypto Correlations
Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins
Go
Commodity Channel Index
Use Commodity Channel Index to analyze current equity momentum
Go
Portfolio Suggestion
Get suggestions outside of your existing asset allocation including your own model portfolios
Go
Portfolio Center
All portfolio management and optimization tools to improve performance of your portfolios
Go
Idea Analyzer
Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas
Go
Equity Valuation
Check real value of public entities based on technical and fundamental data
Go
Bond Directory
Find actively traded corporate debentures issued by US companies
Go
CEO Directory
Screen CEOs from public companies around the world
Go