Correlation Between Amazon and Goldspot Discoveries

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

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

Diversification Opportunities for Amazon and Goldspot Discoveries

-0.14

Correlation Coefficient

Amazon  Goldspot Discoveries

Good diversification

The 3 months correlation between Amazon and Goldspot is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Amazon Inc and Goldspot Discoveries Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Goldspot Discoveries Corp 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 Goldspot Discoveries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Goldspot Discoveries Corp has no effect on the direction of Amazon i.e., Amazon and Goldspot Discoveries go up and down completely randomly.

Pair Corralation between Amazon and Goldspot Discoveries

Given the investment horizon of 90 days Amazon Inc is expected to under-perform the Goldspot Discoveries. But the stock apears to be less risky and, when comparing its historical volatility, Amazon Inc is 3.29 times less risky than Goldspot Discoveries. The stock trades about -0.1 of its potential returns per unit of risk. The Goldspot Discoveries Corp is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  11.00  in Goldspot Discoveries Corp on December 26, 2024 and sell it today you would earn a total of  0.00  from holding Goldspot Discoveries Corp or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Amazon Inc  vs.  Goldspot Discoveries Corp

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 latest unsteady performance, the Stock's basic indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Goldspot Discoveries Corp

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Goldspot Discoveries Corp are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak technical and fundamental indicators, Goldspot Discoveries may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Amazon and Goldspot Discoveries

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

The idea behind Amazon Inc and Goldspot Discoveries Corp 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.