Correlation Between Amazon and OneSpaWorld Holdings

Can any of the company-specific risk be diversified away by investing in both Amazon and OneSpaWorld Holdings 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 Amazon and OneSpaWorld Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Amazon Inc and OneSpaWorld Holdings, you can compare the effects of market volatilities on Amazon and OneSpaWorld Holdings 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 Amazon with a short position of OneSpaWorld Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amazon and OneSpaWorld Holdings.

Diversification Opportunities for Amazon and OneSpaWorld Holdings

0.89

Correlation Coefficient

Amazon  OneSpaWorld Holdings

Very poor diversification

The 3 months correlation between Amazon and OneSpaWorld is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Amazon Inc and OneSpaWorld Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OneSpaWorld Holdings and Amazon 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 Amazon Inc are associated (or correlated) with OneSpaWorld Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of OneSpaWorld Holdings has no effect on the direction of Amazon i.e., Amazon and OneSpaWorld Holdings go up and down completely randomly.

Pair Corralation between Amazon and OneSpaWorld Holdings

Given the investment horizon of 90 days Amazon is expected to generate 1.24 times less return on investment than OneSpaWorld Holdings. But when comparing it to its historical volatility, Amazon Inc is 1.13 times less risky than OneSpaWorld Holdings. It trades about 0.1 of its potential returns per unit of risk. OneSpaWorld Holdings is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  1,675  in OneSpaWorld Holdings on March 30, 2025 and sell it today you would earn a total of  368.00  from holding OneSpaWorld Holdings or generate 21.97% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	100.0%
Values	Daily Returns

Amazon Inc  vs.  OneSpaWorld Holdings

Amazon Inc

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Amazon Inc are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of very unsteady basic indicators, Amazon displayed solid returns over the last few months and may actually be approaching a breakup point.

OneSpaWorld Holdings

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in OneSpaWorld Holdings are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, OneSpaWorld Holdings showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Amazon and OneSpaWorld Holdings

The main advantage of trading using opposite Amazon and OneSpaWorld Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amazon position performs unexpectedly, OneSpaWorld Holdings 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 OneSpaWorld Holdings will offset losses from the drop in OneSpaWorld Holdings' long position.

The idea behind Amazon Inc and OneSpaWorld Holdings 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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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 Stocks Directory module to find actively traded stocks across global markets.