Correlation Between Amgen and NioCorp Developments
Can any of the company-specific risk be diversified away by investing in both Amgen and NioCorp Developments 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 NioCorp Developments into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Amgen Inc and NioCorp Developments Ltd, you can compare the effects of market volatilities on Amgen and NioCorp Developments 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 NioCorp Developments. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amgen and NioCorp Developments.
Diversification Opportunities for Amgen and NioCorp Developments
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Amgen and NioCorp is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Amgen Inc and NioCorp Developments Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NioCorp Developments 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 NioCorp Developments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NioCorp Developments has no effect on the direction of Amgen i.e., Amgen and NioCorp Developments go up and down completely randomly.
Pair Corralation between Amgen and NioCorp Developments
Given the investment horizon of 90 days Amgen is expected to generate 50.62 times less return on investment than NioCorp Developments. But when comparing it to its historical volatility, Amgen Inc is 25.34 times less risky than NioCorp Developments. It trades about 0.02 of its potential returns per unit of risk. NioCorp Developments Ltd is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 80.00 in NioCorp Developments Ltd on September 1, 2024 and sell it today you would earn a total of 53.00 from holding NioCorp Developments Ltd or generate 66.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Amgen Inc vs. NioCorp Developments Ltd
Performance |
| Timeline |
| Amgen Inc |
| NioCorp Developments |
Amgen and NioCorp Developments Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Amgen and NioCorp Developments
The main advantage of trading using opposite Amgen and NioCorp Developments positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amgen position performs unexpectedly, NioCorp Developments 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 NioCorp Developments will offset losses from the drop in NioCorp Developments' long position.| Amgen vs. Tff Pharmaceuticals | Amgen vs. Eliem Therapeutics | Amgen vs. Inhibrx | Amgen vs. Enliven Therapeutics |
| NioCorp Developments vs. Paiute Oil Mining | NioCorp Developments vs. Marfrig Global Foods | NioCorp Developments vs. Emerson Radio | NioCorp Developments vs. Reservoir Media |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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