Correlation Between Amazon and Manning Napier

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

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

Diversification Opportunities for Amazon and Manning Napier

-0.71

Correlation Coefficient

Amazon  Manning Napier

Pay attention - limited upside

The 3 months correlation between Amazon and Manning is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Amazon Inc and Manning Napier Credit in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Manning Napier Credit 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 Manning Napier. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Manning Napier Credit has no effect on the direction of Amazon i.e., Amazon and Manning Napier go up and down completely randomly.

Pair Corralation between Amazon and Manning Napier

Given the investment horizon of 90 days Amazon Inc is expected to under-perform the Manning Napier. In addition to that, Amazon is 7.5 times more volatile than Manning Napier Credit. It trades about -0.12 of its total potential returns per unit of risk. Manning Napier Credit is currently generating about 0.12 per unit of volatility. If you would invest  888.00  in Manning Napier Credit on December 29, 2024 and sell it today you would earn a total of  16.00  from holding Manning Napier Credit or generate 1.8% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	98.39%
Values	Daily Returns

Amazon Inc  vs.  Manning Napier Credit

Amazon Inc

Risk-Adjusted Performance

Very Weak

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

Manning Napier Credit

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Manning Napier Credit are ranked lower than 9 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Manning Napier is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Amazon and Manning Napier

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

The idea behind Amazon Inc and Manning Napier Credit 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..