Correlation Between Orion Office and Amazon

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Can any of the company-specific risk be diversified away by investing in both Orion Office 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 Orion Office and Amazon into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Orion Office Reit and Amazon Inc, you can compare the effects of market volatilities on Orion Office 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 Orion Office with a short position of Amazon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Orion Office and Amazon.

Diversification Opportunities for Orion Office and Amazon

  Correlation Coefficient

Significant diversification

The 3 months correlation between Orion and Amazon is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Orion Office Reit and Amazon Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amazon Inc and Orion Office 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 Orion Office Reit 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 Orion Office i.e., Orion Office and Amazon go up and down completely randomly.

Pair Corralation between Orion Office and Amazon

Considering the 90-day investment horizon Orion Office Reit is expected to under-perform the Amazon. In addition to that, Orion Office is 1.11 times more volatile than Amazon Inc. It trades about -0.38 of its total potential returns per unit of risk. Amazon Inc is currently generating about 0.02 per unit of volatility. If you would invest  9,752  in Amazon Inc on December 24, 2022 and sell it today you would earn a total of  119.00  from holding Amazon Inc or generate 1.22% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
ValuesDaily Returns

Orion Office Reit  vs.  Amazon Inc

 Performance (%) 
Orion Office Reit 

Orion Performance

0 of 100

Over the last 90 days Orion Office Reit has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unsteady performance in the last few months, the Stock's basic indicators remain quite persistent which may send shares a bit higher in April 2023. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.
Amazon Inc 

Amazon Performance

9 of 100

Compared to the overall equity markets, risk-adjusted returns on investments in Amazon Inc are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of very weak basic indicators, Amazon displayed solid returns over the last few months and may actually be approaching a breakup point.

Orion Office and Amazon Volatility Contrast

   Predicted Return Density   

Pair Trading with Orion Office and Amazon

The main advantage of trading using opposite Orion Office and Amazon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Orion Office 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.
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The idea behind Orion Office Reit and Amazon Inc 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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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 ETF Directory module to find actively traded Exchange Traded Funds (ETF) from around the world.

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