Correlation Between Amgen and NextNav Warrant
Can any of the company-specific risk be diversified away by investing in both Amgen and NextNav Warrant 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 NextNav Warrant into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Amgen Inc and NextNav Warrant, you can compare the effects of market volatilities on Amgen and NextNav Warrant 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 NextNav Warrant. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amgen and NextNav Warrant.
Diversification Opportunities for Amgen and NextNav Warrant
-0.85 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Amgen and NextNav is -0.85. Overlapping area represents the amount of risk that can be diversified away by holding Amgen Inc and NextNav Warrant in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NextNav Warrant 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 NextNav Warrant. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NextNav Warrant has no effect on the direction of Amgen i.e., Amgen and NextNav Warrant go up and down completely randomly.
Pair Corralation between Amgen and NextNav Warrant
Given the investment horizon of 90 days Amgen is expected to generate 11.38 times less return on investment than NextNav Warrant. But when comparing it to its historical volatility, Amgen Inc is 3.61 times less risky than NextNav Warrant. It trades about 0.05 of its potential returns per unit of risk. NextNav Warrant is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 70.00 in NextNav Warrant on September 12, 2024 and sell it today you would earn a total of 592.00 from holding NextNav Warrant or generate 845.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 94.89% |
| Values | Daily Returns |
Amgen Inc vs. NextNav Warrant
Performance |
| Timeline |
| Amgen Inc |
| NextNav Warrant |
Amgen and NextNav Warrant Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Amgen and NextNav Warrant
The main advantage of trading using opposite Amgen and NextNav Warrant positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amgen position performs unexpectedly, NextNav Warrant 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 NextNav Warrant will offset losses from the drop in NextNav Warrant's long position.| Amgen vs. Victory Integrity Smallmid Cap | Amgen vs. Hilton Worldwide Holdings | Amgen vs. NVIDIA | Amgen vs. JPMorgan Chase Co |
| NextNav Warrant vs. HUMANA INC | NextNav Warrant vs. Barloworld Ltd ADR | NextNav Warrant vs. Morningstar Unconstrained Allocation | NextNav Warrant vs. Thrivent High Yield |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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