Correlation Between Amazon and Colliers International

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

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

Diversification Opportunities for Amazon and Colliers International

-0.35

Correlation Coefficient

Amazon  Colliers International

Very good diversification

The 3 months correlation between Amazon and Colliers is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Amazon Inc and Colliers International Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Colliers International 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 Colliers International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Colliers International has no effect on the direction of Amazon i.e., Amazon and Colliers International go up and down completely randomly.

Pair Corralation between Amazon and Colliers International

Given the investment horizon of 90 days Amazon Inc is expected to generate 0.9 times more return on investment than Colliers International. However, Amazon Inc is 1.12 times less risky than Colliers International. It trades about 0.12 of its potential returns per unit of risk. Colliers International Group is currently generating about -0.11 per unit of risk. If you would invest  17,535  in Amazon Inc on February 7, 2024 and sell it today you would earn a total of  1,335  from holding Amazon Inc or generate 7.61% 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.  Colliers International Group

Amazon Inc

Risk-Adjusted Performance

8 of 100

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 unfluctuating basic indicators, Amazon may actually be approaching a critical reversion point that can send shares even higher in June 2024.

Colliers International

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Colliers International Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong technical and fundamental indicators, Colliers International is not utilizing all of its potentials. The newest stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Amazon and Colliers International

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

The idea behind Amazon Inc and Colliers International Group 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 Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..