Correlation Between Amgen and Figs
Can any of the company-specific risk be diversified away by investing in both Amgen and Figs 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 Figs into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Amgen Inc and Figs Inc, you can compare the effects of market volatilities on Amgen and Figs 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 Figs. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amgen and Figs.
Diversification Opportunities for Amgen and Figs
Very weak diversification
The 3 months correlation between Amgen and Figs is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Amgen Inc and Figs Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Figs 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 Figs. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Figs Inc has no effect on the direction of Amgen i.e., Amgen and Figs go up and down completely randomly.
Pair Corralation between Amgen and Figs
Given the investment horizon of 90 days Amgen Inc is expected to under-perform the Figs. But the stock apears to be less risky and, when comparing its historical volatility, Amgen Inc is 2.8 times less risky than Figs. The stock trades about -0.13 of its potential returns per unit of risk. The Figs Inc is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest 623.00 in Figs Inc on September 3, 2024 and sell it today you would lose (104.00) from holding Figs Inc or give up 16.69% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Amgen Inc vs. Figs Inc
Performance |
| Timeline |
| Amgen Inc |
| Figs Inc |
Amgen and Figs Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Amgen and Figs
The main advantage of trading using opposite Amgen and Figs positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amgen position performs unexpectedly, Figs 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 Figs will offset losses from the drop in Figs' long position.| Amgen vs. Pfizer Inc | Amgen vs. Johnson Johnson | Amgen vs. Highway Holdings Limited | Amgen vs. QCR Holdings |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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