Correlation Between Amgen and Kandi Technologies
Can any of the company-specific risk be diversified away by investing in both Amgen and Kandi Technologies 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 Kandi Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Amgen Inc and Kandi Technologies Group, you can compare the effects of market volatilities on Amgen and Kandi Technologies 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 Kandi Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amgen and Kandi Technologies.
Diversification Opportunities for Amgen and Kandi Technologies
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Amgen and Kandi is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Amgen Inc and Kandi Technologies Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kandi Technologies 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 Kandi Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kandi Technologies has no effect on the direction of Amgen i.e., Amgen and Kandi Technologies go up and down completely randomly.
Pair Corralation between Amgen and Kandi Technologies
Given the investment horizon of 90 days Amgen Inc is expected to generate 0.47 times more return on investment than Kandi Technologies. However, Amgen Inc is 2.13 times less risky than Kandi Technologies. It trades about -0.21 of its potential returns per unit of risk. Kandi Technologies Group is currently generating about -0.1 per unit of risk. If you would invest 31,349 in Amgen Inc on August 30, 2024 and sell it today you would lose (3,342) from holding Amgen Inc or give up 10.66% 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. Kandi Technologies Group
Performance |
| Timeline |
| Amgen Inc |
| Kandi Technologies |
Amgen and Kandi Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Amgen and Kandi Technologies
The main advantage of trading using opposite Amgen and Kandi Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amgen position performs unexpectedly, Kandi Technologies 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 Kandi Technologies will offset losses from the drop in Kandi Technologies' long position.| Amgen vs. Pharvaris BV | Amgen vs. Brinker International | Amgen vs. Alcoa Corp | Amgen vs. Direxion Daily FTSE |
| Kandi Technologies vs. Gentex | Kandi Technologies vs. Adient PLC | Kandi Technologies vs. Autoliv | Kandi Technologies vs. Fox Factory Holding |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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