Correlation Between Magellan Health and Amazon

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

Diversification Opportunities for Magellan Health and Amazon

0.2
  Correlation Coefficient

Modest diversification

The 3 months correlation between Magellan and Amazon is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Magellan Health Inc and Amazon Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amazon Inc and Magellan Health 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 Magellan Health 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 Magellan Health i.e., Magellan Health and Amazon go up and down completely randomly.

Pair Corralation between Magellan Health and Amazon

If you would invest  9,499  in Magellan Health on August 28, 2022 and sell it today you would earn a total of  0.00  from holding Magellan Health or generate 0.0% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
Accuracy4.76%
ValuesDaily Returns

Magellan Health Inc  vs.  Amazon Inc

 Performance (%) 
       Timeline  
Magellan Health 
Magellan Performance
0 of 100
Over the last 90 days Magellan Health has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent essential indicators, Magellan Health is not utilizing all of its potentials. The new stock price mess, may contribute to short-term losses for the institutional investors.
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 conflicting performance in the last few months, the Stock's basic indicators remain quite persistent which may send shares a bit higher in December 2022. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Amazon Price Channel

Magellan Health and Amazon Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Magellan Health and Amazon

The main advantage of trading using opposite Magellan Health and Amazon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Magellan Health 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.
Magellan Health vs. Concord Medical Services
Magellan Health vs. Community Health Systems
Magellan Health vs. Davita Healthcare Partners
Magellan Health vs. Hca Holdings
The idea behind Magellan Health 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.
Amazon vs. Groupon Cl A
Amazon vs. Aarons Holdings
Amazon vs. American Eagle Outfitters
Amazon vs. Abercrombie Fitch
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 Analyst Recommendations module to analyst recommendations and target price estimates broken down by several categories.

Other Complementary Tools

Premium Stories
Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope
Go
Portfolio Manager
State of the art Portfolio Manager to monitor and improve performance of your invested capital
Go
Stock Tickers
Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites
Go
Analyst Recommendations
Analyst recommendations and target price estimates broken down by several categories
Go
Price Transformation
Use Price Transformation models to analyze depth of different equity instruments across global markets
Go
Equity Analysis
Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities
Go
Idea Optimizer
Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio
Go
Volatility Analysis
Get historical volatility and risk analysis based on latest market data
Go
Stock Tickers
Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites
Go