Correlation Between Amazon and Investec Emerging

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

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

Diversification Opportunities for Amazon and Investec Emerging

-0.03

Correlation Coefficient

Amazon  Investec Emerging

Good diversification

The 3 months correlation between Amazon and Investec is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Amazon Inc and Investec Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Investec Emerging Markets 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 Investec Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Investec Emerging Markets has no effect on the direction of Amazon i.e., Amazon and Investec Emerging go up and down completely randomly.

Pair Corralation between Amazon and Investec Emerging

Given the investment horizon of 90 days Amazon is expected to generate 1.4 times less return on investment than Investec Emerging. In addition to that, Amazon is 2.55 times more volatile than Investec Emerging Markets. It trades about 0.1 of its total potential returns per unit of risk. Investec Emerging Markets is currently generating about 0.37 per unit of volatility. If you would invest  1,007  in Investec Emerging Markets on July 7, 2025 and sell it today you would earn a total of  478.00  from holding Investec Emerging Markets or generate 47.47% 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.  Investec Emerging Markets

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 latest stock price disarray, may contribute to short-term losses for the investors.

Investec Emerging Markets

Risk-Adjusted Performance

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Investec Emerging Markets are ranked lower than 26 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Investec Emerging showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Amazon and Investec Emerging

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

The idea behind Amazon Inc and Investec Emerging Markets 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.