Correlation Between Groupon and Amazon

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

Diversification Opportunities for Groupon and Amazon

0.43
  Correlation Coefficient

Very weak diversification

The 3 months correlation between Groupon and Amazon is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Groupon and Amazon Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amazon Inc and Groupon 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 Groupon 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 Groupon i.e., Groupon and Amazon go up and down completely randomly.

Pair Corralation between Groupon and Amazon

Given the investment horizon of 90 days Groupon is expected to generate 2.42 times less return on investment than Amazon. In addition to that, Groupon is 2.17 times more volatile than Amazon Inc. It trades about 0.08 of its total potential returns per unit of risk. Amazon Inc is currently generating about 0.44 per unit of volatility. If you would invest  8,582  in Amazon Inc on November 4, 2022 and sell it today you would earn a total of  1,933  from holding Amazon Inc or generate 22.52% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

Groupon  vs.  Amazon Inc

 Performance (%) 
       Timeline  
Groupon 
Groupon Performance
7 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Groupon are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite quite unsteady basic indicators, Groupon disclosed solid returns over the last few months and may actually be approaching a breakup point.

Groupon Price Channel

Amazon Inc 
Amazon Performance
7 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Amazon Inc are ranked lower than 7 (%) 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

Groupon and Amazon Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Groupon and Amazon

The main advantage of trading using opposite Groupon and Amazon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Groupon 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.
Groupon vs. LAir Liquide SA
Groupon vs. ScanSource
Groupon vs. Lattice Semiconductor
Groupon vs. Independence Contract Drilling
The idea behind Groupon 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. Dentsply Sirona
Amazon vs. Tabula Rasa HealthCare
Amazon vs. GE HealthCare Technologies
Amazon vs. DaVita HealthCare Partners
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.

Other Complementary Tools

Portfolio Anywhere
Track or share privately all of your investments from the convenience of any device
Price Exposure Probability
Analyze equity upside and downside potential for a given time horizon across multiple markets
Fund Screener
Find actively-traded funds from around the world traded on over 30 global exchanges
Performance Analysis
Check effects of mean-variance optimization against your current asset allocation
Idea Optimizer
Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio
Instant Ratings
Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance
Focused Opportunities
Build portfolios using our predefined set of ideas and optimize them against your investing preferences
Bond Analysis
Evaluate and analyze corporate bonds as a potential investment for your portfolios.
Money Flow Index
Determine momentum by analyzing Money Flow Index and other technical indicators
CEO Directory
Screen CEOs from public companies around the world
Fundamental Analysis
View fundamental data based on most recent published financial statements
Technical Analysis
Check basic technical indicators and analysis based on most latest market data
Earnings Calls
Check upcoming earnings announcements updated hourly across public exchanges