Amazon Inc Stock Volatility

AMZN Stock  USD 186.89  0.34  0.18%   
We consider Amazon very steady. Amazon Inc secures Sharpe Ratio (or Efficiency) of 0.0927, which signifies that the company had a 0.0927% return per unit of standard deviation over the last 3 months. We have found twenty-eight technical indicators for Amazon Inc, which you can use to evaluate the volatility of the firm. Please confirm Amazon's risk adjusted performance of 0.0691, and Mean Deviation of 1.01 to double-check if the risk estimate we provide is consistent with the expected return of 0.12%. Key indicators related to Amazon's volatility include:
30 Days Market Risk
Chance Of Distress
30 Days Economic Sensitivity
Amazon Stock volatility depicts how high the prices fluctuate around the mean (or its average) price. In other words, it is a statistical measure of the distribution of Amazon daily returns, and it is calculated using variance and standard deviation. We also use Amazon's beta, its sensitivity to the market, as well as its odds of financial distress to provide a more practical estimation of Amazon volatility.

ESG Sustainability

While most ESG disclosures are voluntary, Amazon's sustainability indicators can be used to identify proper investment strategies using environmental, social, and governance scores that are crucial to Amazon's managers and investors.
Since volatility provides investors with entry points to take advantage of stock prices, companies, such as Amazon can benefit from it. Downward market volatility can be a perfect environment for investors who play the long game. Here, they may decide to buy additional stocks of Amazon at lower prices. For example, an investor can purchase Amazon stock that has halved in price over a short period. This will lower your average cost per share, thereby improving your portfolio's performance when the markets normalize. Similarly, when the prices of Amazon's stock rises, investors can sell out and invest the proceeds in other equities with better opportunities. Investing when markets are volatile with better valuations will accord both investors and companies the opportunity to generate better long-term returns.

Moving against Amazon Stock

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Amazon Market Sensitivity And Downside Risk

Amazon's beta coefficient measures the volatility of Amazon stock compared to the systematic risk of the entire market represented by your selected benchmark. In mathematical terms, beta represents the slope of the line through a regression of data points where each of these points represents Amazon stock's returns against your selected market. In other words, Amazon's beta of 0.81 provides an investor with an approximation of how much risk Amazon stock can potentially add to one of your existing portfolios. Amazon Inc has relatively low volatility with skewness of 0.03 and kurtosis of 0.37. Understanding different market volatility trends often help investors to time the market. Properly using volatility indicators enable traders to measure Amazon's stock risk against market volatility during both bullish and bearish trends. The higher level of volatility that comes with bear markets can directly impact Amazon's stock price while adding stress to investors as they watch their shares' value plummet. This usually forces investors to rebalance their portfolios by buying different financial instruments as prices fall.
3 Months Beta |Analyze Amazon Inc Demand Trend
Check current 90 days Amazon correlation with market (NYSE Composite)

Amazon Beta

Amazon standard deviation measures the daily dispersion of prices over your selected time horizon relative to its mean. A typical volatile entity has a high standard deviation, while the deviation of a stable instrument is usually low. As a downside, the standard deviation calculates all uncertainty as risk, even when it is in your favor, such as above-average returns.

Standard Deviation

It is essential to understand the difference between upside risk (as represented by Amazon's standard deviation) and the downside risk, which can be measured by semi-deviation or downside deviation of Amazon's daily returns or price. Since the actual investment returns on holding a position in amazon stock tend to have a non-normal distribution, there will be different probabilities for losses than for gains. The likelihood of losses is reflected in the downside risk of an investment in Amazon.

Using Amazon Put Option to Manage Risk

Put options written on Amazon grant holders of the option the right to sell a specified amount of Amazon at a specified price within a specified time frame. The put buyer has a limited loss and, while not fully unlimited gains, as the price of Amazon Stock cannot fall below zero, the put buyer does gain as the price drops. So, one way investors can hedge Amazon's position is by buying a put option against it. The put option used this way is usually referred to as insurance. If an undesired outcome occurs and loss on holding Amazon will be realized, the loss incurred will be offset by the profits made with the option trade.

Amazon's PUT expiring on 2024-06-14

       Amazon Price At Expiration  

Current Amazon Insurance Chain

DeltaGammaOpen IntExpirationCurrent SpreadLast Price
2024-06-14 PUT at $210.0-0.9920.002522024-06-1422.4 - 23.8521.75View
2024-06-14 PUT at $205.0-0.96990.007612024-06-1417.8 - 18.620.3View
2024-06-14 PUT at $197.5-0.87840.023482024-06-149.1 - 11.19.8View
2024-06-14 PUT at $195.0-0.88520.02993102024-06-147.0 - 8.458.0View
2024-06-14 PUT at $192.5-0.80630.0442222024-06-144.5 - 6.255.4View
2024-06-14 PUT at $190.0-0.79180.07988852024-06-143.4 - 3.653.35View
2024-06-14 PUT at $187.5-0.55790.104718272024-06-141.79 - 1.861.82View
2024-06-14 PUT at $185.0-0.30780.089984992024-06-140.75 - 0.810.78View
2024-06-14 PUT at $182.5-0.13190.052975562024-06-140.27 - 0.310.27View
2024-06-14 PUT at $180.0-0.06030.026176762024-06-140.1 - 0.130.12View
2024-06-14 PUT at $177.5-0.02970.013174092024-06-140.05 - 0.070.06View
View All Amazon Options

Amazon Inc Stock Volatility Analysis

Volatility refers to the frequency at which Amazon stock price increases or decreases within a specified period. These fluctuations usually indicate the level of risk that's associated with Amazon's price changes. Investors will then calculate the volatility of Amazon's stock to predict their future moves. A stock that has erratic price changes quickly hits new highs, and lows are considered highly volatile. A stock with relatively stable price changes has low volatility. A highly volatile stock is riskier, but the risk cuts both ways. Investing in highly volatile security can either be highly successful, or you may experience significant failure. There are two main types of Amazon's volatility:

Historical Volatility

This type of stock volatility measures Amazon's fluctuations based on previous trends. It's commonly used to predict Amazon's future behavior based on its past. However, it cannot conclusively determine the future direction of the stock.

Implied Volatility

This type of volatility provides a positive outlook on future price fluctuations for Amazon's current market price. This means that the stock will return to its initially predicted market price. This type of volatility can be derived from derivative instruments written on Amazon's to be redeemed at a future date.
The output start index for this execution was zero with a total number of output elements of sixty-one. Amazon Inc Average Price is the average of the sum of open, high, low and close daily prices of a bar. It can be used to smooth an indicator that normally takes just the closing price as input.

Amazon Projected Return Density Against Market

Given the investment horizon of 90 days Amazon has a beta of 0.8141 . This suggests as returns on the market go up, Amazon average returns are expected to increase less than the benchmark. However, during the bear market, the loss on holding Amazon Inc will be expected to be much smaller as well.
Most traded equities are subject to two types of risk - systematic (i.e., market) and unsystematic (i.e., nonmarket or company-specific) risk. Unsystematic risk is the risk that events specific to Amazon or Broadline Retail sector will adversely affect the stock's price. This type of risk can be diversified away by owning several different stocks in different industries whose stock prices have shown a small correlation to each other. On the other hand, systematic risk is the risk that Amazon's price will be affected by overall stock market movements and cannot be diversified away. So, no matter how many positions you have, you cannot eliminate market risk. However, you can measure a Amazon stock's historical response to market movements and buy it if you are comfortable with its volatility direction. Beta and standard deviation are two commonly used measures to help you make the right decision.
Amazon Inc has an alpha of 0.1216, implying that it can generate a 0.12 percent excess return over NYSE Composite after adjusting for the inherited market risk (beta).
   Predicted Return Density   
Amazon's volatility is measured either by using standard deviation or beta. Standard deviation will reflect the average amount of how amazon stock's price will differ from the mean after some time.To get its calculation, you should first determine the mean price during the specified period then subtract that from each price point.

What Drives an Amazon Price Volatility?

Several factors can influence a stock's market volatility:


Specific events can influence volatility within a particular industry. For instance, a significant weather upheaval in a crucial oil-production site may cause oil prices to increase in the oil sector. The direct result will be the rise in the stock price of oil distribution companies. Similarly, any government regulation in a specific industry could negatively influence stock prices due to increased regulations on compliance that may impact the company's future earnings and growth.

Political and Economic environment

When governments make significant decisions regarding trade agreements, policies, and legislation regarding specific industries, they will influence stock prices. Everything from speeches to elections may influence investors, who can directly influence the stock prices in any particular industry. The prevailing economic situation also plays a significant role in stock prices. When the economy is doing well, investors will have a positive reaction and hence, better stock prices and vice versa.

The Company's Performance

Sometimes volatility will only affect an individual company. For example, a revolutionary product launch or strong earnings report may attract many investors to purchase the company. This positive attention will raise the company's stock price. In contrast, product recalls and data breaches may negatively influence a company's stock prices.

Amazon Stock Risk Measures

Given the investment horizon of 90 days the coefficient of variation of Amazon is 1078.34. The daily returns are distributed with a variance of 1.66 and standard deviation of 1.29. The mean deviation of Amazon Inc is currently at 0.97. For similar time horizon, the selected benchmark (NYSE Composite) has volatility of 0.62
Alpha over NYSE Composite
Beta against NYSE Composite0.81
Overall volatility
Information ratio 0.09

Amazon Stock Return Volatility

Amazon historical daily return volatility represents how much of Amazon stock's daily returns swing around its mean - it is a statistical measure of its dispersion of returns. The firm inherits 1.2897% risk (volatility on return distribution) over the 90 days horizon. By contrast, NYSE Composite accepts 0.6315% volatility on return distribution over the 90 days horizon.

About Amazon Volatility

Volatility is a rate at which the price of Amazon or any other equity instrument increases or decreases for a given set of returns. It is measured by calculating the standard deviation of the annualized returns over a given period of time and shows the range to which the price of Amazon may increase or decrease. In other words, similar to Amazon's beta indicator, it measures the risk of Amazon and helps estimate the fluctuations that may happen in a short period of time. So if prices of Amazon fluctuate rapidly in a short time span, it is termed to have high volatility, and if it swings slowly in a more extended period, it is understood to have low volatility.
Please read more on our technical analysis page.
Last ReportedProjected for Next Year
Selling And Marketing Expenses44.4 B46.6 B
Market Cap97.8 B102.7 B
Amazon's stock volatility refers to the amount of uncertainty or risk involved with the size of changes in its stock's price. It is a statistical measure of the dispersion of returns on Amazon Stock over a specified period of time, often expressed as the standard deviation of daily returns. In other words, it measures how much Amazon's price varies over time.

3 ways to utilize Amazon's volatility to invest better

Higher Amazon's stock volatility means that the price of its stock is changing rapidly and unpredictably, while lower stock volatility indicates that the price of Amazon Inc stock is relatively stable. Investors and traders use stock volatility as an indicator of risk and potential reward, as stocks with higher volatility can offer the potential for more significant returns but also come with a greater risk of losses. Amazon Inc stock volatility can provide helpful information for making investment decisions in the following ways:
  • Measuring Risk: Volatility can be used as a measure of risk, which can help you determine the potential fluctuations in the value of Amazon Inc investment. A higher volatility means higher risk and potentially larger changes in value.
  • Identifying Opportunities: High volatility in Amazon's stock can indicate that there is potential for significant price movements, either up or down, which could present investment opportunities.
  • Diversification: Understanding how the volatility of Amazon's stock relates to your other investments can help you create a well-diversified portfolio of assets with varying levels of risk.
Remember it's essential to remember that stock volatility is just one of many factors to consider when making investment decisions, and it should be used in conjunction with other fundamental and technical analysis tools.

Amazon Investment Opportunity

Amazon Inc has a volatility of 1.29 and is 2.05 times more volatile than NYSE Composite. 11 percent of all equities and portfolios are less risky than Amazon. You can use Amazon Inc to protect your portfolios against small market fluctuations. The stock experiences a normal downward trend and little activity. Check odds of Amazon to be traded at $185.02 in 90 days.

Weak diversification

The correlation between Amazon Inc and NYA is 0.39 (i.e., Weak diversification) for selected investment horizon. Overlapping area represents the amount of risk that can be diversified away by holding Amazon Inc and NYA in the same portfolio, assuming nothing else is changed.

Amazon Additional Risk Indicators

The analysis of Amazon's secondary risk indicators is one of the essential steps in making a buy or sell decision. The process involves identifying the amount of risk involved in Amazon's investment and either accepting that risk or mitigating it. Along with some common measures of Amazon stock's risk such as standard deviation, beta, or value at risk, we also provide a set of secondary indicators that can assist in the individual investment decision or help in hedging the risk of your existing portfolios.
Please note, the risk measures we provide can be used independently or collectively to perform a risk assessment. When comparing two potential stocks, we recommend comparing similar stocks with homogenous growth potential and valuation from related markets to determine which investment holds the most risk.

Amazon Suggested Diversification Pairs

Pair trading is one of the very effective strategies used by professional day traders and hedge funds capitalizing on short-time and mid-term market inefficiencies. The approach is based on the fact that the ratio of prices of two correlating shares is long-term stable and oscillates around the average value. If the correlation ratio comes outside the common area, you can speculate with a high success rate that the ratio will return to the mean value and collect a profit.
The effect of pair diversification on risk is to reduce it, but we should note this doesn't apply to all risk types. When we trade pairs against Amazon as a counterpart, there is always some inherent risk that will never be diversified away no matter what. This volatility limits the effect of tactical diversification using pair trading. Amazon's systematic risk is the inherent uncertainty of the entire market, and therefore cannot be mitigated even by pair-trading it against the equity that is not highly correlated to it. On the other hand, Amazon's unsystematic risk describes the types of risk that we can protect against, at least to some degree, by selecting a matching pair that is not perfectly correlated to Amazon Inc.

Additional Information and Resources on Investing in Amazon Stock

When determining whether Amazon Inc offers a strong return on investment in its stock, a comprehensive analysis is essential. The process typically begins with a thorough review of Amazon's financial statements, including income statements, balance sheets, and cash flow statements, to assess its financial health. Key financial ratios are used to gauge profitability, efficiency, and growth potential of Amazon Inc Stock. Outlined below are crucial reports that will aid in making a well-informed decision on Amazon Inc Stock:
Check out Trending Equities to better understand how to build diversified portfolios, which includes a position in Amazon Inc. Also, note that the market value of any company could be closely tied with the direction of predictive economic indicators such as signals in nation.
You can also try the Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
Is Broadline Retail space expected to grow? Or is there an opportunity to expand the business' product line in the future? Factors like these will boost the valuation of Amazon. If investors know Amazon will grow in the future, the company's valuation will be higher. The financial industry is built on trying to define current growth potential and future valuation accurately. All the valuation information about Amazon listed above have to be considered, but the key to understanding future value is determining which factors weigh more heavily than others.
Quarterly Earnings Growth
Earnings Share
Revenue Per Share
Quarterly Revenue Growth
Return On Assets
The market value of Amazon Inc is measured differently than its book value, which is the value of Amazon that is recorded on the company's balance sheet. Investors also form their own opinion of Amazon's value that differs from its market value or its book value, called intrinsic value, which is Amazon's true underlying value. Investors use various methods to calculate intrinsic value and buy a stock when its market value falls below its intrinsic value. Because Amazon's market value can be influenced by many factors that don't directly affect Amazon's underlying business (such as a pandemic or basic market pessimism), market value can vary widely from intrinsic value.
Please note, there is a significant difference between Amazon's value and its price as these two are different measures arrived at by different means. Investors typically determine if Amazon is a good investment by looking at such factors as earnings, sales, fundamental and technical indicators, competition as well as analyst projections. However, Amazon's price is the amount at which it trades on the open market and represents the number that a seller and buyer find agreeable to each party.