Correlation Between Amgen and Apogee Enterprises
Can any of the company-specific risk be diversified away by investing in both Amgen and Apogee Enterprises 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 Apogee Enterprises into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Amgen Inc and Apogee Enterprises, you can compare the effects of market volatilities on Amgen and Apogee Enterprises 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 Apogee Enterprises. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amgen and Apogee Enterprises.
Diversification Opportunities for Amgen and Apogee Enterprises
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Amgen and Apogee is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Amgen Inc and Apogee Enterprises in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Apogee Enterprises 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 Apogee Enterprises. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Apogee Enterprises has no effect on the direction of Amgen i.e., Amgen and Apogee Enterprises go up and down completely randomly.
Pair Corralation between Amgen and Apogee Enterprises
Given the investment horizon of 90 days Amgen is expected to generate 3.11 times less return on investment than Apogee Enterprises. But when comparing it to its historical volatility, Amgen Inc is 1.4 times less risky than Apogee Enterprises. It trades about 0.05 of its potential returns per unit of risk. Apogee Enterprises is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 3,834 in Apogee Enterprises on August 31, 2024 and sell it today you would earn a total of 4,544 from holding Apogee Enterprises or generate 118.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Amgen Inc vs. Apogee Enterprises
Performance |
| Timeline |
| Amgen Inc |
| Apogee Enterprises |
Amgen and Apogee Enterprises Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Amgen and Apogee Enterprises
The main advantage of trading using opposite Amgen and Apogee Enterprises positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amgen position performs unexpectedly, Apogee Enterprises 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 Apogee Enterprises will offset losses from the drop in Apogee Enterprises' long position.| Amgen vs. Pfizer Inc | Amgen vs. RLJ Lodging Trust | Amgen vs. Aquagold International | Amgen vs. Stepstone Group |
| Apogee Enterprises vs. Quanex Building Products | Apogee Enterprises vs. Janus International Group | Apogee Enterprises vs. Interface | Apogee Enterprises vs. Azek Company |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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