Correlation Between Blue Bird and Amazon
Can any of the company-specific risk be diversified away by investing in both Blue Bird 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 Blue Bird and Amazon into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Blue Bird Corp and Amazon Inc, you can compare the effects of market volatilities on Blue Bird 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 Blue Bird with a short position of Amazon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Blue Bird and Amazon.
Diversification Opportunities for Blue Bird and Amazon
Almost no diversification
The 3 months correlation between Blue and Amazon is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Blue Bird Corp and Amazon Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amazon Inc and Blue Bird 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 Blue Bird Corp 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 Blue Bird i.e., Blue Bird and Amazon go up and down completely randomly.
Pair Corralation between Blue Bird and Amazon
Given the investment horizon of 90 days Blue Bird Corp is expected to generate 1.79 times more return on investment than Amazon. However, Blue Bird is 1.79 times more volatile than Amazon Inc. It trades about 0.34 of its potential returns per unit of risk. Amazon Inc is currently generating about 0.16 per unit of risk. If you would invest 3,267 in Blue Bird Corp on December 30, 2023 and sell it today you would earn a total of 567.00 from holding Blue Bird Corp or generate 17.36% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Blue Bird Corp vs. Amazon Inc
Performance |
Timeline |
Blue Bird Corp |
Amazon Inc |
Blue Bird and Amazon Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Blue Bird and Amazon
The main advantage of trading using opposite Blue Bird and Amazon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Blue Bird 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.Blue Bird vs. General Motors | Blue Bird vs. Li AutoInc | Blue Bird vs. Lotus Technology Warrants | Blue Bird vs. Volcon Inc |
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 the Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
Other Complementary Tools
Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
Fundamental Analysis View fundamental data based on most recent published financial statements | |
Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
AI Investment Finder Use AI to screen and filter profitable investment opportunities | |
Stocks Directory Find actively traded stocks across global markets | |
Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm |