Correlation Between Amgen and National CineMedia
Can any of the company-specific risk be diversified away by investing in both Amgen and National CineMedia 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 National CineMedia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Amgen Inc and National CineMedia, you can compare the effects of market volatilities on Amgen and National CineMedia 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 National CineMedia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amgen and National CineMedia.
Diversification Opportunities for Amgen and National CineMedia
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between Amgen and National is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Amgen Inc and National CineMedia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on National CineMedia 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 National CineMedia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of National CineMedia has no effect on the direction of Amgen i.e., Amgen and National CineMedia go up and down completely randomly.
Pair Corralation between Amgen and National CineMedia
Given the investment horizon of 90 days Amgen Inc is expected to under-perform the National CineMedia. But the stock apears to be less risky and, when comparing its historical volatility, Amgen Inc is 1.32 times less risky than National CineMedia. The stock trades about -0.22 of its potential returns per unit of risk. The National CineMedia is currently generating about -0.07 of returns per unit of risk over similar time horizon. If you would invest 720.00 in National CineMedia on August 29, 2024 and sell it today you would lose (40.00) from holding National CineMedia or give up 5.56% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Amgen Inc vs. National CineMedia
Performance |
| Timeline |
| Amgen Inc |
| National CineMedia |
Amgen and National CineMedia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Amgen and National CineMedia
The main advantage of trading using opposite Amgen and National CineMedia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amgen position performs unexpectedly, National CineMedia 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 National CineMedia will offset losses from the drop in National CineMedia's long position.| Amgen vs. Eliem Therapeutics | Amgen vs. Scpharmaceuticals | Amgen vs. Milestone Pharmaceuticals | Amgen vs. Seres Therapeutics |
| National CineMedia vs. MGO Global Common | National CineMedia vs. Baosheng Media Group | National CineMedia vs. Impact Fusion International | National CineMedia vs. ZW Data Action |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
Other Complementary Tools
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes |