Correlation Between Amazon and First Bancorp

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

Diversification Opportunities for Amazon and First Bancorp

-0.8
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between Amazon and First is -0.8. Overlapping area represents the amount of risk that can be diversified away by holding Amazon Inc and First Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Bancorp 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 First Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Bancorp has no effect on the direction of Amazon i.e., Amazon and First Bancorp go up and down completely randomly.

Pair Corralation between Amazon and First Bancorp

Given the investment horizon of 90 days Amazon Inc is expected to under-perform the First Bancorp. In addition to that, Amazon is 1.48 times more volatile than First Bancorp. It trades about -0.03 of its total potential returns per unit of risk. First Bancorp is currently generating about 0.04 per unit of volatility. If you would invest  2,361  in First Bancorp on September 6, 2022 and sell it today you would earn a total of  616.00  from holding First Bancorp or generate 26.09% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthSignificant
Accuracy100.0%
ValuesDaily Returns

Amazon Inc  vs.  First Bancorp

 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 weak performance in the last few months, the Stock's basic indicators remain quite persistent which may send shares a bit higher in January 2023. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Amazon Price Channel

First Bancorp 
First Performance
4 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in First Bancorp are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong essential indicators, First Bancorp is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

First Price Channel

Amazon and First Bancorp Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Amazon and First Bancorp

The main advantage of trading using opposite Amazon and First Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amazon position performs unexpectedly, First Bancorp 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 First Bancorp will offset losses from the drop in First Bancorp's long position.
Amazon vs. Carvana Co
The idea behind Amazon Inc and First Bancorp 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.
First Bancorp vs. Affinity Bancshares
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.

Other Complementary Tools

Idea Analyzer
Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas
Go
Idea Optimizer
Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio
Go
Portfolio Rebalancing
Analyze risk-adjusted returns against different time horizons to find asset-allocation targets
Go
Crypto Correlations
Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins
Go
Companies Directory
Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals
Go
Equity Valuation
Check real value of public entities based on technical and fundamental data
Go