Correlation Between Amgen and BioRestorative Therapies
Can any of the company-specific risk be diversified away by investing in both Amgen and BioRestorative Therapies 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 BioRestorative Therapies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Amgen Inc and BioRestorative Therapies, you can compare the effects of market volatilities on Amgen and BioRestorative Therapies 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 BioRestorative Therapies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amgen and BioRestorative Therapies.
Diversification Opportunities for Amgen and BioRestorative Therapies
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Amgen and BioRestorative is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Amgen Inc and BioRestorative Therapies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BioRestorative Therapies 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 BioRestorative Therapies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BioRestorative Therapies has no effect on the direction of Amgen i.e., Amgen and BioRestorative Therapies go up and down completely randomly.
Pair Corralation between Amgen and BioRestorative Therapies
Given the investment horizon of 90 days Amgen is expected to generate 1.8 times less return on investment than BioRestorative Therapies. But when comparing it to its historical volatility, Amgen Inc is 4.31 times less risky than BioRestorative Therapies. It trades about 0.02 of its potential returns per unit of risk. BioRestorative Therapies is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 310.00 in BioRestorative Therapies on September 3, 2024 and sell it today you would lose (160.00) from holding BioRestorative Therapies or give up 51.61% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Amgen Inc vs. BioRestorative Therapies
Performance |
| Timeline |
| Amgen Inc |
| BioRestorative Therapies |
Amgen and BioRestorative Therapies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Amgen and BioRestorative Therapies
The main advantage of trading using opposite Amgen and BioRestorative Therapies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amgen position performs unexpectedly, BioRestorative Therapies 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 BioRestorative Therapies will offset losses from the drop in BioRestorative Therapies' long position.| Amgen vs. Pfizer Inc | Amgen vs. Johnson Johnson | Amgen vs. Highway Holdings Limited | Amgen vs. QCR Holdings |
| BioRestorative Therapies vs. Pulmatrix | BioRestorative Therapies vs. Capricor Therapeutics | BioRestorative Therapies vs. Akari Therapeutics PLC | BioRestorative Therapies vs. Soleno 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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