Correlation Between Amgen and FTAI Aviation
Can any of the company-specific risk be diversified away by investing in both Amgen and FTAI Aviation 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 FTAI Aviation into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Amgen Inc and FTAI Aviation Ltd, you can compare the effects of market volatilities on Amgen and FTAI Aviation 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 FTAI Aviation. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amgen and FTAI Aviation.
Diversification Opportunities for Amgen and FTAI Aviation
-0.8 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Amgen and FTAI is -0.8. Overlapping area represents the amount of risk that can be diversified away by holding Amgen Inc and FTAI Aviation Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FTAI Aviation 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 FTAI Aviation. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FTAI Aviation has no effect on the direction of Amgen i.e., Amgen and FTAI Aviation go up and down completely randomly.
Pair Corralation between Amgen and FTAI Aviation
Given the investment horizon of 90 days Amgen Inc is expected to under-perform the FTAI Aviation. In addition to that, Amgen is 2.12 times more volatile than FTAI Aviation Ltd. It trades about -0.21 of its total potential returns per unit of risk. FTAI Aviation Ltd is currently generating about 0.12 per unit of volatility. If you would invest 2,710 in FTAI Aviation Ltd on August 30, 2024 and sell it today you would earn a total of 78.00 from holding FTAI Aviation Ltd or generate 2.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Amgen Inc vs. FTAI Aviation Ltd
Performance |
| Timeline |
| Amgen Inc |
| FTAI Aviation |
Amgen and FTAI Aviation Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Amgen and FTAI Aviation
The main advantage of trading using opposite Amgen and FTAI Aviation positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amgen position performs unexpectedly, FTAI Aviation 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 FTAI Aviation will offset losses from the drop in FTAI Aviation's long position.| Amgen vs. Ikena Oncology | Amgen vs. Eliem Therapeutics | Amgen vs. HCW Biologics | Amgen vs. Tempest Therapeutics |
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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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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