Correlation Between Amazon and Precious Metals
Can any of the company-specific risk be diversified away by investing in both Amazon and Precious Metals 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 Precious Metals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Amazon Inc and Precious Metals Ultrasector, you can compare the effects of market volatilities on Amazon and Precious Metals 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 Precious Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amazon and Precious Metals.
Diversification Opportunities for Amazon and Precious Metals
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Amazon and Precious is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Amazon Inc and Precious Metals Ultrasector in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Precious Metals Ultr 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 Precious Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Precious Metals Ultr has no effect on the direction of Amazon i.e., Amazon and Precious Metals go up and down completely randomly.
Pair Corralation between Amazon and Precious Metals
Given the investment horizon of 90 days Amazon Inc is expected to under-perform the Precious Metals. But the stock apears to be less risky and, when comparing its historical volatility, Amazon Inc is 2.49 times less risky than Precious Metals. The stock trades about -0.03 of its potential returns per unit of risk. The Precious Metals Ultrasector is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 10,647 in Precious Metals Ultrasector on July 26, 2025 and sell it today you would earn a total of 3,168 from holding Precious Metals Ultrasector or generate 29.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Amazon Inc vs. Precious Metals Ultrasector
Performance |
| Timeline |
| Amazon Inc |
| Precious Metals Ultr |
Amazon and Precious Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Amazon and Precious Metals
The main advantage of trading using opposite Amazon and Precious Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amazon position performs unexpectedly, Precious Metals 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 Precious Metals will offset losses from the drop in Precious Metals' long position.| Amazon vs. Alibaba Group Holding | Amazon vs. ATRenew Inc DRC | Amazon vs. Liquidity Services | Amazon vs. GameStop Corp |
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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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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