Correlation Between Amgen and Yuexiu Transport
Can any of the company-specific risk be diversified away by investing in both Amgen and Yuexiu Transport 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 Yuexiu Transport into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Amgen Inc and Yuexiu Transport Infrastructure, you can compare the effects of market volatilities on Amgen and Yuexiu Transport 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 Yuexiu Transport. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amgen and Yuexiu Transport.
Diversification Opportunities for Amgen and Yuexiu Transport
-0.73 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Amgen and Yuexiu is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding Amgen Inc and Yuexiu Transport Infrastructur in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yuexiu Transport Inf 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 Yuexiu Transport. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yuexiu Transport Inf has no effect on the direction of Amgen i.e., Amgen and Yuexiu Transport go up and down completely randomly.
Pair Corralation between Amgen and Yuexiu Transport
Given the investment horizon of 90 days Amgen is expected to generate 6.48 times less return on investment than Yuexiu Transport. But when comparing it to its historical volatility, Amgen Inc is 1.7 times less risky than Yuexiu Transport. It trades about 0.03 of its potential returns per unit of risk. Yuexiu Transport Infrastructure is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 32.00 in Yuexiu Transport Infrastructure on September 2, 2024 and sell it today you would earn a total of 26.00 from holding Yuexiu Transport Infrastructure or generate 81.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Amgen Inc vs. Yuexiu Transport Infrastructur
Performance |
| Timeline |
| Amgen Inc |
| Yuexiu Transport Inf |
Amgen and Yuexiu Transport Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Amgen and Yuexiu Transport
The main advantage of trading using opposite Amgen and Yuexiu Transport positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amgen position performs unexpectedly, Yuexiu Transport 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 Yuexiu Transport will offset losses from the drop in Yuexiu Transport's long position.The idea behind Amgen Inc and Yuexiu Transport Infrastructure pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Yuexiu Transport vs. Zhejiang Expressway Co | Yuexiu Transport vs. Jiangsu Expressway Co | Yuexiu Transport vs. Jiangsu Expressway | Yuexiu Transport vs. Verra Mobility Corp |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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