Correlation Between TOR Minerals and Amazon

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

Diversification Opportunities for TOR Minerals and Amazon

0.45
  Correlation Coefficient

Very weak diversification

The 3 months correlation between TOR Minerals and Amazon is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding TOR Minerals International and Amazon Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amazon Inc and TOR Minerals 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 TOR Minerals International 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 TOR Minerals i.e., TOR Minerals and Amazon go up and down completely randomly.

Pair Corralation between TOR Minerals and Amazon

Given the investment horizon of 90 days TOR Minerals International is expected to generate 2.52 times more return on investment than Amazon. However, TOR Minerals is 2.52 times more volatile than Amazon Inc. It trades about 0.06 of its potential returns per unit of risk. Amazon Inc is currently generating about -0.03 per unit of risk. If you would invest  90.00  in TOR Minerals International on September 7, 2022 and sell it today you would earn a total of  145.00  from holding TOR Minerals International or generate 161.11% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

TOR Minerals International  vs.  Amazon Inc

 Performance (%) 
       Timeline  
TOR Minerals Interna 
TOR Minerals Performance
0 of 100
Over the last 90 days TOR Minerals International has generated negative risk-adjusted returns adding no value to investors with long positions. Even with latest weak performance, the Stock's basic indicators remain steady and the new chaos on Wall Street may also be a sign of medium-term gains for the company stakeholders.

TOR Minerals 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

TOR Minerals and Amazon Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with TOR Minerals and Amazon

The main advantage of trading using opposite TOR Minerals and Amazon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TOR Minerals 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 TOR Minerals International 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.

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