Correlation Between Amazon and Strategic Asset

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

By analyzing existing cross correlation between Amazon Inc and Strategic Asset Management, you can compare the effects of market volatilities on Amazon and Strategic Asset 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 Strategic Asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amazon and Strategic Asset.

Diversification Opportunities for Amazon and Strategic Asset

-0.2

Correlation Coefficient

Amazon  Strategic Asset

Good diversification

The 3 months correlation between Amazon and Strategic is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Amazon Inc and Strategic Asset Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Strategic Asset Mana 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 Strategic Asset. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Strategic Asset Mana has no effect on the direction of Amazon i.e., Amazon and Strategic Asset go up and down completely randomly.

Pair Corralation between Amazon and Strategic Asset

Given the investment horizon of 90 days Amazon Inc is expected to under-perform the Strategic Asset. In addition to that, Amazon is 6.57 times more volatile than Strategic Asset Management. It trades about -0.02 of its total potential returns per unit of risk. Strategic Asset Management is currently generating about 0.21 per unit of volatility. If you would invest  1,276  in Strategic Asset Management on July 27, 2025 and sell it today you would earn a total of  52.00  from holding Strategic Asset Management or generate 4.08% return on investment over 90 days.

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

Amazon Inc  vs.  Strategic Asset Management

Amazon Inc

Risk-Adjusted Performance

Weakest

Over the last 90 days Amazon Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Amazon is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Strategic Asset Mana

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Strategic Asset Management are ranked lower than 17 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Strategic Asset is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Amazon and Strategic Asset

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

The idea behind Amazon Inc and Strategic Asset Management 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.