Correlation Between Hospital Mater and Amazon

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

By analyzing existing cross correlation between Hospital Mater Dei and Amazon Inc, you can compare the effects of market volatilities on Hospital Mater and Amazon 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 Hospital Mater with a short position of Amazon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hospital Mater and Amazon.

Diversification Opportunities for Hospital Mater and Amazon

-0.69

Correlation Coefficient

Hospital Mater  Amazon

Excellent diversification

The 3 months correlation between Hospital and Amazon is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Hospital Mater Dei and Amazon Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amazon Inc and Hospital Mater 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 Hospital Mater Dei are associated (or correlated) with Amazon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amazon Inc has no effect on the direction of Hospital Mater i.e., Hospital Mater and Amazon go up and down completely randomly.

Pair Corralation between Hospital Mater and Amazon

Assuming the 90 days trading horizon Hospital Mater Dei is expected to under-perform the Amazon. In addition to that, Hospital Mater is 1.3 times more volatile than Amazon Inc. It trades about -0.06 of its total potential returns per unit of risk. Amazon Inc is currently generating about 0.11 per unit of volatility. If you would invest  2,624  in Amazon Inc on October 26, 2024 and sell it today you would earn a total of  4,306  from holding Amazon Inc or generate 164.1% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	99.8%
Values	Daily Returns

Hospital Mater Dei  vs.  Amazon Inc

Hospital Mater Dei

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Hospital Mater Dei has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in February 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Amazon Inc

Risk-Adjusted Performance

19 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Amazon Inc are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Amazon sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Hospital Mater and Amazon

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

The idea behind Hospital Mater Dei and Amazon Inc 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.