Correlation Between Rogers Communications and Amazon

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

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

Diversification Opportunities for Rogers Communications and Amazon

0.48

Correlation Coefficient

Rogers Communications  Amazon

Very weak diversification

The 3 months correlation between Rogers and Amazon is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Rogers Communications and Amazon Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amazon Inc and Rogers Communications 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 Rogers Communications 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 Rogers Communications i.e., Rogers Communications and Amazon go up and down completely randomly.

Pair Corralation between Rogers Communications and Amazon

Assuming the 90 days trading horizon Rogers Communications is expected to generate 0.9 times more return on investment than Amazon. However, Rogers Communications is 1.11 times less risky than Amazon. It trades about -0.1 of its potential returns per unit of risk. Amazon Inc is currently generating about -0.15 per unit of risk. If you would invest  2,865  in Rogers Communications on December 30, 2024 and sell it today you would lose (305.00) from holding Rogers Communications or give up 10.65% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Rogers Communications  vs.  Amazon Inc

Rogers Communications

Risk-Adjusted Performance

Very Weak

Over the last 90 days Rogers Communications has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unsteady performance, the Stock's forward indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

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. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Rogers Communications and Amazon

The main advantage of trading using opposite Rogers Communications and Amazon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rogers Communications 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 Rogers Communications 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.