Correlation Between Amgen and Allient
Can any of the company-specific risk be diversified away by investing in both Amgen and Allient 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 Amgen and Allient into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Amgen Inc and Allient, you can compare the effects of market volatilities on Amgen and Allient 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 Amgen with a short position of Allient. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amgen and Allient.
Diversification Opportunities for Amgen and Allient
Pay attention - limited upside
The 3 months correlation between Amgen and Allient is -0.83. Overlapping area represents the amount of risk that can be diversified away by holding Amgen Inc and Allient in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Allient and Amgen 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 Amgen Inc are associated (or correlated) with Allient. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Allient has no effect on the direction of Amgen i.e., Amgen and Allient go up and down completely randomly.
Pair Corralation between Amgen and Allient
Given the investment horizon of 90 days Amgen Inc is expected to under-perform the Allient. But the stock apears to be less risky and, when comparing its historical volatility, Amgen Inc is 1.08 times less risky than Allient. The stock trades about -0.2 of its potential returns per unit of risk. The Allient is currently generating about 0.33 of returns per unit of risk over similar time horizon. If you would invest 2,325 in Allient on September 13, 2024 and sell it today you would earn a total of 332.00 from holding Allient or generate 14.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Amgen Inc vs. Allient
Performance |
| Timeline |
| Amgen Inc |
| Allient |
Amgen and Allient Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Amgen and Allient
The main advantage of trading using opposite Amgen and Allient positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amgen position performs unexpectedly, Allient 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 Allient will offset losses from the drop in Allient's long position.| Amgen vs. Puma Biotechnology | Amgen vs. Iovance Biotherapeutics | Amgen vs. Sarepta Therapeutics | Amgen vs. Day One Biopharmaceuticals |
| Allient vs. Vicor | Allient vs. LSI Industries | Allient vs. Shenzhen Genvict Technologies | Allient vs. Topsec Technologies Group |
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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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