Correlation Between Amgen and Niagara Mohawk
Can any of the company-specific risk be diversified away by investing in both Amgen and Niagara Mohawk 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 Niagara Mohawk into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Amgen Inc and Niagara Mohawk Power, you can compare the effects of market volatilities on Amgen and Niagara Mohawk 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 Niagara Mohawk. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amgen and Niagara Mohawk.
Diversification Opportunities for Amgen and Niagara Mohawk
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Amgen and Niagara is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Amgen Inc and Niagara Mohawk Power in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Niagara Mohawk Power 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 Niagara Mohawk. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Niagara Mohawk Power has no effect on the direction of Amgen i.e., Amgen and Niagara Mohawk go up and down completely randomly.
Pair Corralation between Amgen and Niagara Mohawk
Given the investment horizon of 90 days Amgen Inc is expected to generate 0.73 times more return on investment than Niagara Mohawk. However, Amgen Inc is 1.36 times less risky than Niagara Mohawk. It trades about 0.02 of its potential returns per unit of risk. Niagara Mohawk Power is currently generating about -0.01 per unit of risk. If you would invest 25,108 in Amgen Inc on September 12, 2024 and sell it today you would earn a total of 2,270 from holding Amgen Inc or generate 9.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Amgen Inc vs. Niagara Mohawk Power
Performance |
| Timeline |
| Amgen Inc |
| Niagara Mohawk Power |
Amgen and Niagara Mohawk Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Amgen and Niagara Mohawk
The main advantage of trading using opposite Amgen and Niagara Mohawk positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amgen position performs unexpectedly, Niagara Mohawk 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 Niagara Mohawk will offset losses from the drop in Niagara Mohawk's long position.| Amgen vs. Victory Integrity Smallmid Cap | Amgen vs. Hilton Worldwide Holdings | Amgen vs. NVIDIA | Amgen vs. JPMorgan Chase Co |
| Niagara Mohawk vs. WiMi Hologram Cloud | Niagara Mohawk vs. Kandi Technologies Group | Niagara Mohawk vs. Ziff Davis | Niagara Mohawk vs. Ark Restaurants 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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