Correlation Between Amazon and Allscripts Healthcare

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

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

Diversification Opportunities for Amazon and Allscripts Healthcare

-0.8

Correlation Coefficient

Amazon  Allscripts Healthcare

Pay attention - limited upside

The 3 months correlation between Amazon and Allscripts is -0.8. Overlapping area represents the amount of risk that can be diversified away by holding Amazon Inc and Allscripts Healthcare Solution in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Allscripts Healthcare 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 Allscripts Healthcare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Allscripts Healthcare has no effect on the direction of Amazon i.e., Amazon and Allscripts Healthcare go up and down completely randomly.

Pair Corralation between Amazon and Allscripts Healthcare

If you would invest  613.00  in Allscripts Healthcare Solutions on January 26, 2024 and sell it today you would earn a total of  0.00  from holding Allscripts Healthcare Solutions or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	4.76%
Values	Daily Returns

Amazon Inc  vs.  Allscripts Healthcare Solution

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

Allscripts Healthcare

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Allscripts Healthcare Solutions has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in May 2024. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Amazon and Allscripts Healthcare

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

The idea behind Amazon Inc and Allscripts Healthcare Solutions 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.