Correlation Between Amgen and Milestone Pharmaceuticals
Can any of the company-specific risk be diversified away by investing in both Amgen and Milestone Pharmaceuticals 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 Milestone Pharmaceuticals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Amgen Inc and Milestone Pharmaceuticals, you can compare the effects of market volatilities on Amgen and Milestone Pharmaceuticals 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 Milestone Pharmaceuticals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amgen and Milestone Pharmaceuticals.
Diversification Opportunities for Amgen and Milestone Pharmaceuticals
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Amgen and Milestone is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Amgen Inc and Milestone Pharmaceuticals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Milestone Pharmaceuticals 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 Milestone Pharmaceuticals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Milestone Pharmaceuticals has no effect on the direction of Amgen i.e., Amgen and Milestone Pharmaceuticals go up and down completely randomly.
Pair Corralation between Amgen and Milestone Pharmaceuticals
Given the investment horizon of 90 days Amgen Inc is expected to under-perform the Milestone Pharmaceuticals. But the stock apears to be less risky and, when comparing its historical volatility, Amgen Inc is 1.74 times less risky than Milestone Pharmaceuticals. The stock trades about -0.15 of its potential returns per unit of risk. The Milestone Pharmaceuticals is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 142.00 in Milestone Pharmaceuticals on August 30, 2024 and sell it today you would earn a total of 45.00 from holding Milestone Pharmaceuticals or generate 31.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Amgen Inc vs. Milestone Pharmaceuticals
Performance |
| Timeline |
| Amgen Inc |
| Milestone Pharmaceuticals |
Amgen and Milestone Pharmaceuticals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Amgen and Milestone Pharmaceuticals
The main advantage of trading using opposite Amgen and Milestone Pharmaceuticals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amgen position performs unexpectedly, Milestone Pharmaceuticals 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 Milestone Pharmaceuticals will offset losses from the drop in Milestone Pharmaceuticals' long position.| Amgen vs. Pfizer Inc | Amgen vs. RLJ Lodging Trust | Amgen vs. Aquagold International | Amgen vs. Stepstone Group |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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