Correlation Between Amazon and BROOKDALE
Can any of the company-specific risk be diversified away by investing in both Amazon and BROOKDALE 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 BROOKDALE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Amazon Inc and BROOKDALE SR LIVING, you can compare the effects of market volatilities on Amazon and BROOKDALE 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 BROOKDALE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amazon and BROOKDALE.
Diversification Opportunities for Amazon and BROOKDALE
Excellent diversification
The 3 months correlation between Amazon and BROOKDALE is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Amazon Inc and BROOKDALE SR LIVING in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BROOKDALE SR LIVING 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 BROOKDALE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BROOKDALE SR LIVING has no effect on the direction of Amazon i.e., Amazon and BROOKDALE go up and down completely randomly.
Pair Corralation between Amazon and BROOKDALE
Assuming the 90 days trading horizon Amazon Inc is expected to generate 0.82 times more return on investment than BROOKDALE. However, Amazon Inc is 1.22 times less risky than BROOKDALE. It trades about 0.3 of its potential returns per unit of risk. BROOKDALE SR LIVING is currently generating about 0.03 per unit of risk. If you would invest 19,390 in Amazon Inc on September 12, 2024 and sell it today you would earn a total of 2,540 from holding Amazon Inc or generate 13.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Amazon Inc vs. BROOKDALE SR LIVING
Performance |
| Timeline |
| Amazon Inc |
| BROOKDALE SR LIVING |
Amazon and BROOKDALE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Amazon and BROOKDALE
The main advantage of trading using opposite Amazon and BROOKDALE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amazon position performs unexpectedly, BROOKDALE 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 BROOKDALE will offset losses from the drop in BROOKDALE's long position.| Amazon vs. Verizon Communications | Amazon vs. INTERSHOP Communications Aktiengesellschaft | Amazon vs. Singapore Telecommunications Limited | Amazon vs. MTI WIRELESS EDGE |
| BROOKDALE vs. FARO Technologies | BROOKDALE vs. DELTA AIR LINES | BROOKDALE vs. Altair Engineering | BROOKDALE vs. Digilife Technologies Limited |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
Other Complementary Tools
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas |