Correlation Between Amazon and ANI Pharmaceuticals

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

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

Diversification Opportunities for Amazon and ANI Pharmaceuticals

-0.57

Correlation Coefficient

Amazon  ANI Pharmaceuticals

Excellent diversification

The 3 months correlation between Amazon and ANI is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Amazon Inc and ANI Pharmaceuticals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ANI Pharmaceuticals 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 ANI Pharmaceuticals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ANI Pharmaceuticals has no effect on the direction of Amazon i.e., Amazon and ANI Pharmaceuticals go up and down completely randomly.

Pair Corralation between Amazon and ANI Pharmaceuticals

Assuming the 90 days horizon Amazon Inc is expected to generate 0.84 times more return on investment than ANI Pharmaceuticals. However, Amazon Inc is 1.2 times less risky than ANI Pharmaceuticals. It trades about 0.06 of its potential returns per unit of risk. ANI Pharmaceuticals is currently generating about 0.03 per unit of risk. If you would invest  11,790  in Amazon Inc on April 24, 2025 and sell it today you would earn a total of  7,572  from holding Amazon Inc or generate 64.22% return on investment over 90 days.

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

Amazon Inc  vs.  ANI Pharmaceuticals

Amazon Inc

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Amazon Inc are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Amazon reported solid returns over the last few months and may actually be approaching a breakup point.

ANI Pharmaceuticals

Risk-Adjusted Performance

Very Weak

Over the last 90 days ANI Pharmaceuticals has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest fragile 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 Amazon and ANI Pharmaceuticals

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

The idea behind Amazon Inc and ANI Pharmaceuticals 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.