Correlation Between Spire Healthcare and Amazon

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

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

Diversification Opportunities for Spire Healthcare and Amazon

0.69

Correlation Coefficient

Spire Healthcare  Amazon

Poor diversification

The 3 months correlation between Spire and Amazon is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Spire Healthcare Group and Amazon Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amazon Inc and Spire Healthcare 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 Spire Healthcare Group 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 Spire Healthcare i.e., Spire Healthcare and Amazon go up and down completely randomly.

Pair Corralation between Spire Healthcare and Amazon

Assuming the 90 days trading horizon Spire Healthcare Group is expected to under-perform the Amazon. But the stock apears to be less risky and, when comparing its historical volatility, Spire Healthcare Group is 1.67 times less risky than Amazon. The stock trades about -0.15 of its potential returns per unit of risk. The Amazon Inc is currently generating about -0.04 of returns per unit of risk over similar time horizon. If you would invest  22,600  in Amazon Inc on December 23, 2024 and sell it today you would lose (3,075) from holding Amazon Inc or give up 13.61% of portfolio value over 90 days.

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

Spire Healthcare Group  vs.  Amazon Inc

Spire Healthcare

Risk-Adjusted Performance

Very Weak

Over the last 90 days Spire Healthcare Group 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 technical and fundamental indicators remain rather sound which may send shares a bit higher in April 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

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 latest uncertain performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with Spire Healthcare and Amazon

The main advantage of trading using opposite Spire Healthcare and Amazon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Spire Healthcare 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 Spire Healthcare Group 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 Stocks Directory module to find actively traded stocks across global markets.