Correlation Between QVC and Amazon

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

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

Diversification Opportunities for QVC and Amazon

-0.67

Correlation Coefficient

QVC  Amazon

Excellent diversification

The 3 months correlation between QVC and Amazon is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding QVC Group and Amazon Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amazon Inc and QVC 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 QVC Group are associated (or correlated) with Amazon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amazon Inc has no effect on the direction of QVC i.e., QVC and Amazon go up and down completely randomly.

Pair Corralation between QVC and Amazon

Assuming the 90 days horizon QVC Group is expected to generate 114.33 times more return on investment than Amazon. However, QVC is 114.33 times more volatile than Amazon Inc. It trades about 0.15 of its potential returns per unit of risk. Amazon Inc is currently generating about 0.13 per unit of risk. If you would invest  26,650  in QVC Group on May 5, 2025 and sell it today you would lose (25,240) from holding QVC Group or give up 94.71% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	34.92%
Values	Daily Returns

QVC Group  vs.  Amazon Inc

QVC Group

Risk-Adjusted Performance

Good

Over the last 90 days QVC Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat fragile technical and fundamental indicators, QVC sustained solid returns over the last few months and may actually be approaching a breakup point.

Amazon Inc

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Amazon Inc are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of very unsteady basic indicators, Amazon displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with QVC and Amazon

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

The idea behind QVC Group and Amazon Inc 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.