Correlation Between Amgen and Cars
Can any of the company-specific risk be diversified away by investing in both Amgen and Cars 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 Cars into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Amgen Inc and Cars Inc, you can compare the effects of market volatilities on Amgen and Cars 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 Cars. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amgen and Cars.
Diversification Opportunities for Amgen and Cars
Very good diversification
The 3 months correlation between Amgen and Cars is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Amgen Inc and Cars Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cars Inc 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 Cars. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cars Inc has no effect on the direction of Amgen i.e., Amgen and Cars go up and down completely randomly.
Pair Corralation between Amgen and Cars
Given the investment horizon of 90 days Amgen Inc is expected to generate 0.64 times more return on investment than Cars. However, Amgen Inc is 1.57 times less risky than Cars. It trades about 0.04 of its potential returns per unit of risk. Cars Inc is currently generating about 0.02 per unit of risk. If you would invest 22,877 in Amgen Inc on August 27, 2024 and sell it today you would earn a total of 6,523 from holding Amgen Inc or generate 28.51% 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. Cars Inc
Performance |
| Timeline |
| Amgen Inc |
| Cars Inc |
Amgen and Cars Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Amgen and Cars
The main advantage of trading using opposite Amgen and Cars positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amgen position performs unexpectedly, Cars 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 Cars will offset losses from the drop in Cars' long position.| Amgen vs. Eliem Therapeutics | Amgen vs. HCW Biologics | Amgen vs. Scpharmaceuticals | Amgen vs. Milestone Pharmaceuticals |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
Other Complementary Tools
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities |