Correlation Between Amazon and Phoenix Global

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

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

Diversification Opportunities for Amazon and Phoenix Global

0.36

Correlation Coefficient

Amazon  Phoenix Global

Weak diversification

The 3 months correlation between Amazon and Phoenix is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Amazon Inc and Phoenix Global Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Phoenix Global Mining 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 Phoenix Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Phoenix Global Mining has no effect on the direction of Amazon i.e., Amazon and Phoenix Global go up and down completely randomly.

Pair Corralation between Amazon and Phoenix Global

Given the investment horizon of 90 days Amazon Inc is expected to generate 0.25 times more return on investment than Phoenix Global. However, Amazon Inc is 3.98 times less risky than Phoenix Global. It trades about -0.12 of its potential returns per unit of risk. Phoenix Global Mining is currently generating about -0.04 per unit of risk. If you would invest  22,130  in Amazon Inc on December 29, 2024 and sell it today you would lose (2,858) from holding Amazon Inc or give up 12.91% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	95.31%
Values	Daily Returns

Amazon Inc  vs.  Phoenix Global Mining

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.

Phoenix Global Mining

Risk-Adjusted Performance

Very Weak

Over the last 90 days Phoenix Global Mining has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's technical and fundamental indicators remain rather sound which may send shares a bit higher in April 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with Amazon and Phoenix Global

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

The idea behind Amazon Inc and Phoenix Global Mining 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.

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 the Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..