Correlation Between Unibail Rodamco and Amazon

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

By analyzing existing cross correlation between Unibail Rodamco Westfield SE and Amazon Inc, you can compare the effects of market volatilities on Unibail Rodamco 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 Unibail Rodamco with a short position of Amazon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Unibail Rodamco and Amazon.

Diversification Opportunities for Unibail Rodamco and Amazon

0.52

Correlation Coefficient

Unibail Rodamco  Amazon

Very weak diversification

The 3 months correlation between Unibail and Amazon is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Unibail Rodamco Westfield SE and Amazon Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amazon Inc and Unibail Rodamco 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 Unibail Rodamco Westfield SE 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 Unibail Rodamco i.e., Unibail Rodamco and Amazon go up and down completely randomly.

Pair Corralation between Unibail Rodamco and Amazon

If you would invest  10,621  in Amazon Inc on January 19, 2024 and sell it today you would earn a total of  7,582  from holding Amazon Inc or generate 71.39% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	0.4%
Values	Daily Returns

Unibail Rodamco Westfield SE  vs.  Amazon Inc

Unibail Rodamco West

Risk-Adjusted Performance

0 of 100

Very Weak

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

Amazon Inc

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Amazon Inc are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of very unsteady basic indicators, Amazon displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Unibail Rodamco and Amazon

The main advantage of trading using opposite Unibail Rodamco and Amazon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Unibail Rodamco 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.

The idea behind Unibail Rodamco Westfield SE 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.

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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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.