Correlation Between Amazon and Target Healthcare
Can any of the company-specific risk be diversified away by investing in both Amazon and Target 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 Target 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 Target Healthcare REIT, you can compare the effects of market volatilities on Amazon and Target 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 Target Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amazon and Target Healthcare.
Diversification Opportunities for Amazon and Target Healthcare
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Amazon and Target is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Amazon Inc and Target Healthcare REIT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Target Healthcare REIT 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 Target Healthcare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Target Healthcare REIT has no effect on the direction of Amazon i.e., Amazon and Target Healthcare go up and down completely randomly.
Pair Corralation between Amazon and Target Healthcare
Given the investment horizon of 90 days Amazon Inc is expected to under-perform the Target Healthcare. In addition to that, Amazon is 1.82 times more volatile than Target Healthcare REIT. It trades about -0.05 of its total potential returns per unit of risk. Target Healthcare REIT is currently generating about -0.08 per unit of volatility. If you would invest 9,871 in Target Healthcare REIT on July 20, 2025 and sell it today you would lose (561.00) from holding Target Healthcare REIT or give up 5.68% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Amazon Inc vs. Target Healthcare REIT
Performance |
| Timeline |
| Amazon Inc |
| Target Healthcare REIT |
Amazon and Target Healthcare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Amazon and Target Healthcare
The main advantage of trading using opposite Amazon and Target Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amazon position performs unexpectedly, Target 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 Target Healthcare will offset losses from the drop in Target Healthcare's long position.| Amazon vs. Alibaba Group Holding | Amazon vs. ATRenew Inc DRC | Amazon vs. Liquidity Services | Amazon vs. GameStop Corp |
| Target Healthcare vs. Atresmedia | Target Healthcare vs. Lowland Investment Co | Target Healthcare vs. Liberty Media Corp | Target Healthcare vs. Edinburgh Worldwide Investment |
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 the Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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