Correlation Between Amazon and FUNR

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

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

Diversification Opportunities for Amazon and FUNR

0.17

Correlation Coefficient

Amazon  FUNR

Average diversification

The 3 months correlation between Amazon and FUNR is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Amazon Inc and FUNR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FUNR 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 FUNR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FUNR has no effect on the direction of Amazon i.e., Amazon and FUNR go up and down completely randomly.

Pair Corralation between Amazon and FUNR

Given the investment horizon of 90 days Amazon Inc is expected to under-perform the FUNR. But the stock apears to be less risky and, when comparing its historical volatility, Amazon Inc is 6.98 times less risky than FUNR. The stock trades about -0.01 of its potential returns per unit of risk. The FUNR is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  0.06  in FUNR on July 29, 2025 and sell it today you would lose (0.02) from holding FUNR or give up 33.33% of portfolio value over 90 days.

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

Amazon Inc  vs.  FUNR

Amazon Inc

Risk-Adjusted Performance

Weakest

Over the last 90 days Amazon Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Amazon is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

FUNR

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in FUNR are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Even with relatively unfluctuating basic indicators, FUNR reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Amazon and FUNR

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

The idea behind Amazon Inc and FUNR 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..