Correlation Between Amazon and Blackrock Enhanced

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

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

Diversification Opportunities for Amazon and Blackrock Enhanced

-0.47

Correlation Coefficient

Amazon  Blackrock Enhanced

Very good diversification

The 3 months correlation between Amazon and Blackrock is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Amazon Inc and Blackrock Enhanced Government in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blackrock Enhanced 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 Blackrock Enhanced. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blackrock Enhanced has no effect on the direction of Amazon i.e., Amazon and Blackrock Enhanced go up and down completely randomly.

Pair Corralation between Amazon and Blackrock Enhanced

Given the investment horizon of 90 days Amazon Inc is expected to under-perform the Blackrock Enhanced. In addition to that, Amazon is 1.3 times more volatile than Blackrock Enhanced Government. It trades about -0.12 of its total potential returns per unit of risk. Blackrock Enhanced Government is currently generating about 0.01 per unit of volatility. If you would invest  967.00  in Blackrock Enhanced Government on December 29, 2024 and sell it today you would earn a total of  5.00  from holding Blackrock Enhanced Government or generate 0.52% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	95.08%
Values	Daily Returns

Amazon Inc  vs.  Blackrock Enhanced Government

Amazon Inc

Risk-Adjusted Performance

Very Weak

Over the last 90 days Amazon Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in April 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Blackrock Enhanced

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Blackrock Enhanced Government are ranked lower than 1 (%) of all funds and portfolios of funds over the last 90 days. Despite nearly stable technical and fundamental indicators, Blackrock Enhanced is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Amazon and Blackrock Enhanced

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

The idea behind Amazon Inc and Blackrock Enhanced Government 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.