Correlation Between Positive Physicians and Amazon

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

Diversification Opportunities for Positive Physicians and Amazon

0.48
  Correlation Coefficient

Very weak diversification

The 3 months correlation between Positive and Amazon is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Positive Physicians Holdings and Amazon Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amazon Inc and Positive Physicians 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 Positive Physicians Holdings 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 Positive Physicians i.e., Positive Physicians and Amazon go up and down completely randomly.

Pair Corralation between Positive Physicians and Amazon

Given the investment horizon of 90 days Positive Physicians Holdings is expected to generate 1.01 times more return on investment than Amazon. However, Positive Physicians is 1.01 times more volatile than Amazon Inc. It trades about 0.32 of its potential returns per unit of risk. Amazon Inc is currently generating about 0.07 per unit of risk. If you would invest  640.00  in Positive Physicians Holdings on September 3, 2022 and sell it today you would earn a total of  160.00  from holding Positive Physicians Holdings or generate 25.0% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

Positive Physicians Holdings  vs.  Amazon Inc

 Performance (%) 
       Timeline  
Positive Physicians 
Positive Performance
0 of 100
Over the last 90 days Positive Physicians Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable technical indicators, Positive Physicians is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Positive 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 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

Positive Physicians and Amazon Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Positive Physicians and Amazon

The main advantage of trading using opposite Positive Physicians and Amazon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Positive Physicians 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 Positive Physicians Holdings 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.

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