Correlation Between Amgen and Axsome Therapeutics
Can any of the company-specific risk be diversified away by investing in both Amgen and Axsome Therapeutics 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 Axsome Therapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Amgen Inc and Axsome Therapeutics, you can compare the effects of market volatilities on Amgen and Axsome Therapeutics 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 Axsome Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amgen and Axsome Therapeutics.
Diversification Opportunities for Amgen and Axsome Therapeutics
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Amgen and Axsome is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Amgen Inc and Axsome Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Axsome Therapeutics 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 Axsome Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Axsome Therapeutics has no effect on the direction of Amgen i.e., Amgen and Axsome Therapeutics go up and down completely randomly.
Pair Corralation between Amgen and Axsome Therapeutics
Given the investment horizon of 90 days Amgen Inc is expected to under-perform the Axsome Therapeutics. But the stock apears to be less risky and, when comparing its historical volatility, Amgen Inc is 1.28 times less risky than Axsome Therapeutics. The stock trades about -0.14 of its potential returns per unit of risk. The Axsome Therapeutics is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 9,011 in Axsome Therapeutics on August 27, 2024 and sell it today you would earn a total of 857.00 from holding Axsome Therapeutics or generate 9.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Amgen Inc vs. Axsome Therapeutics
Performance |
| Timeline |
| Amgen Inc |
| Axsome Therapeutics |
Amgen and Axsome Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Amgen and Axsome Therapeutics
The main advantage of trading using opposite Amgen and Axsome Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amgen position performs unexpectedly, Axsome Therapeutics 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 Axsome Therapeutics will offset losses from the drop in Axsome Therapeutics' long position.| Amgen vs. Eliem Therapeutics | Amgen vs. HCW Biologics | Amgen vs. Scpharmaceuticals | Amgen vs. Milestone Pharmaceuticals |
| Axsome Therapeutics vs. Incyte | Axsome Therapeutics vs. Sarepta Therapeutics | Axsome Therapeutics vs. ACADIA Pharmaceuticals | Axsome Therapeutics vs. Viking Therapeutics |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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