Correlation Between Amazon and Medifast

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Amazon and Medifast 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 Medifast into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Amazon Inc and Medifast, you can compare the effects of market volatilities on Amazon and Medifast 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 Medifast. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amazon and Medifast.

Diversification Opportunities for Amazon and Medifast

0.68
  Correlation Coefficient

Poor diversification

The 12 months correlation between Amazon and Medifast is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Amazon Inc and Medifast in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Medifast 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 Medifast. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Medifast has no effect on the direction of Amazon i.e., Amazon and Medifast go up and down completely randomly.

Pair Corralation between Amazon and Medifast

Given the investment horizon of 90 days Amazon Inc is expected to under-perform the Medifast. But the stock apears to be less risky and, when comparing its historical volatility, Amazon Inc is 1.18 times less risky than Medifast. The stock trades about -0.03 of its potential returns per unit of risk. The Medifast is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest  18,511  in Medifast on September 1, 2022 and sell it today you would lose (5,906)  from holding Medifast or give up 31.91% of portfolio value over 90 days.
Time Period12 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy100.0%
ValuesDaily Returns

Amazon Inc  vs.  Medifast

 Performance (%) 
       Timeline  
Amazon Inc 
Amazon Performance
0 of 100
Over the last 90 days Amazon Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest conflicting performance, the Stock's basic indicators remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

Amazon Price Channel

Medifast 
Medifast Performance
0 of 100
Over the last 90 days Medifast has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest fragile performance, the Stock's technical and fundamental indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Medifast Price Channel

Amazon and Medifast Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Amazon and Medifast

The main advantage of trading using opposite Amazon and Medifast positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amazon position performs unexpectedly, Medifast 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 Medifast will offset losses from the drop in Medifast's long position.
Amazon vs. Groupon Cl A
Amazon vs. Aarons Holdings
Amazon vs. American Eagle Outfitters
Amazon vs. Abercrombie Fitch
The idea behind Amazon Inc and Medifast 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.
Medifast vs. Service Corp International
Medifast vs. HR Block
Medifast vs. Dte Energy
Medifast vs. Mercari Inc ADR
Check out your portfolio center. 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.

Other Complementary Tools

Global Markets Map
Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes
Go
Stock Tickers
Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites
Go
Aroon Oscillator
Analyze current equity momentum using Aroon Oscillator and other momentum ratios
Go
Watchlist Optimization
Optimize watchlists to build efficient portfolio or rebalance existing positions based on mean-variance optimization algorithm
Go
Equity Valuation
Check real value of public entities based on technical and fundamental data
Go
Aroon Oscillator
Analyze current equity momentum using Aroon Oscillator and other momentum ratios
Go
Equity Valuation
Check real value of public entities based on technical and fundamental data
Go