Correlation Between Amazon and RUECKER IMMOBILIEN

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

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

Diversification Opportunities for Amazon and RUECKER IMMOBILIEN

-0.77

Correlation Coefficient

Amazon  RUECKER IMMOBILIEN

Pay attention - limited upside

The 3 months correlation between Amazon and RUECKER is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding Amazon Inc and RUECKER IMMOBILIEN in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RUECKER IMMOBILIEN 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 RUECKER IMMOBILIEN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of RUECKER IMMOBILIEN has no effect on the direction of Amazon i.e., Amazon and RUECKER IMMOBILIEN go up and down completely randomly.

Pair Corralation between Amazon and RUECKER IMMOBILIEN

Assuming the 90 days trading horizon Amazon Inc is expected to generate 0.25 times more return on investment than RUECKER IMMOBILIEN. However, Amazon Inc is 3.96 times less risky than RUECKER IMMOBILIEN. It trades about 0.1 of its potential returns per unit of risk. RUECKER IMMOBILIEN is currently generating about 0.01 per unit of risk. If you would invest  9,091  in Amazon Inc on October 5, 2024 and sell it today you would earn a total of  12,339  from holding Amazon Inc or generate 135.73% 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.  RUECKER IMMOBILIEN

Amazon Inc

Risk-Adjusted Performance

0 of 100

Solid

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 fragile basic indicators, Amazon displayed solid returns over the last few months and may actually be approaching a breakup point.

RUECKER IMMOBILIEN

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days RUECKER IMMOBILIEN has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's fundamental indicators remain very healthy which may send shares a bit higher in February 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Amazon and RUECKER IMMOBILIEN

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

The idea behind Amazon Inc and RUECKER IMMOBILIEN 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.

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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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.