Correlation Between CH Robinson and Amazon

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

Diversification Opportunities for CH Robinson and Amazon

-0.42
  Correlation Coefficient

Very good diversification

The 24 months correlation between CH Robinson and Amazon is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding CH Robinson Worldwide and Amazon Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amazon Inc and CH Robinson 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 CH Robinson Worldwide 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 CH Robinson i.e., CH Robinson and Amazon go up and down completely randomly.

Pair Corralation between CH Robinson and Amazon

Given the investment horizon of 90 days CH Robinson Worldwide is expected to generate 0.69 times more return on investment than Amazon. However, CH Robinson Worldwide is 1.44 times less risky than Amazon. It trades about -0.09 of its potential returns per unit of risk. Amazon Inc is currently generating about -0.13 per unit of risk. If you would invest  11,221  in CH Robinson Worldwide on September 4, 2022 and sell it today you would lose (1,550)  from holding CH Robinson Worldwide or give up 13.81% of portfolio value over 90 days.
Time Period24 Months [change]
DirectionMoves Against 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

CH Robinson Worldwide  vs.  Amazon Inc

 Performance (%) 
       Timeline  
CH Robinson Worldwide 
CH Robinson Performance
1 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in CH Robinson Worldwide are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable basic indicators, CH Robinson is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

CH Robinson Price Channel

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 quite persistent basic indicators, Amazon is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

Amazon Price Channel

CH Robinson and Amazon Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with CH Robinson and Amazon

The main advantage of trading using opposite CH Robinson and Amazon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CH Robinson 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.
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The idea behind CH Robinson Worldwide 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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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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.

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