Correlation Between Amazon and Sunoco
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By analyzing existing cross correlation between Amazon Inc and Sunoco LP 6, you can compare the effects of market volatilities on Amazon and Sunoco 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 Sunoco. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amazon and Sunoco.
Diversification Opportunities for Amazon and Sunoco
Very good diversification
The 3 months correlation between Amazon and Sunoco is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Amazon Inc and Sunoco LP 6 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sunoco LP 6 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 Sunoco. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sunoco LP 6 has no effect on the direction of Amazon i.e., Amazon and Sunoco go up and down completely randomly.
Pair Corralation between Amazon and Sunoco
Given the investment horizon of 90 days Amazon Inc is expected to generate 4.92 times more return on investment than Sunoco. However, Amazon is 4.92 times more volatile than Sunoco LP 6. It trades about 0.2 of its potential returns per unit of risk. Sunoco LP 6 is currently generating about -0.02 per unit of risk. If you would invest 18,649 in Amazon Inc on September 13, 2024 and sell it today you would earn a total of 4,377 from holding Amazon Inc or generate 23.47% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 96.83% |
Values | Daily Returns |
Amazon Inc vs. Sunoco LP 6
Performance |
Timeline |
Amazon Inc |
Sunoco LP 6 |
Amazon and Sunoco Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Amazon and Sunoco
The main advantage of trading using opposite Amazon and Sunoco positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amazon position performs unexpectedly, Sunoco 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 Sunoco will offset losses from the drop in Sunoco's long position.The idea behind Amazon Inc and Sunoco LP 6 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.Sunoco vs. Alvotech | Sunoco vs. Merit Medical Systems | Sunoco vs. Definitive Healthcare Corp | Sunoco vs. FiscalNote Holdings |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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