Correlation Between Amazon and ROSENBAUER INTERNAT

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Can any of the company-specific risk be diversified away by investing in both Amazon and ROSENBAUER INTERNAT 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 ROSENBAUER INTERNAT into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Amazon Inc and ROSENBAUER INTERNAT, you can compare the effects of market volatilities on Amazon and ROSENBAUER INTERNAT 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 ROSENBAUER INTERNAT. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amazon and ROSENBAUER INTERNAT.

Diversification Opportunities for Amazon and ROSENBAUER INTERNAT

0.7
  Correlation Coefficient

Poor diversification

The 3 months correlation between Amazon and ROSENBAUER is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Amazon Inc and ROSENBAUER INTERNAT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ROSENBAUER INTERNAT 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 ROSENBAUER INTERNAT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ROSENBAUER INTERNAT has no effect on the direction of Amazon i.e., Amazon and ROSENBAUER INTERNAT go up and down completely randomly.

Pair Corralation between Amazon and ROSENBAUER INTERNAT

Assuming the 90 days trading horizon Amazon is expected to generate 1.17 times less return on investment than ROSENBAUER INTERNAT. In addition to that, Amazon is 1.03 times more volatile than ROSENBAUER INTERNAT. It trades about 0.15 of its total potential returns per unit of risk. ROSENBAUER INTERNAT is currently generating about 0.18 per unit of volatility. If you would invest  3,910  in ROSENBAUER INTERNAT on April 24, 2025 and sell it today you would earn a total of  880.00  from holding ROSENBAUER INTERNAT or generate 22.51% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy98.44%
ValuesDaily Returns

Amazon Inc  vs.  ROSENBAUER INTERNAT

 Performance 
       Timeline  
Amazon Inc 

Risk-Adjusted Performance

Good

 
Weak
 
Strong
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. In spite of very uncertain basic indicators, Amazon displayed solid returns over the last few months and may actually be approaching a breakup point.
ROSENBAUER INTERNAT 

Risk-Adjusted Performance

Good

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in ROSENBAUER INTERNAT are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of rather fragile forward indicators, ROSENBAUER INTERNAT exhibited solid returns over the last few months and may actually be approaching a breakup point.

Amazon and ROSENBAUER INTERNAT Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Amazon and ROSENBAUER INTERNAT

The main advantage of trading using opposite Amazon and ROSENBAUER INTERNAT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amazon position performs unexpectedly, ROSENBAUER INTERNAT 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 ROSENBAUER INTERNAT will offset losses from the drop in ROSENBAUER INTERNAT's long position.
The idea behind Amazon Inc and ROSENBAUER INTERNAT 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.

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