Correlation Between Amgen and New Providence
Can any of the company-specific risk be diversified away by investing in both Amgen and New Providence 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 New Providence into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Amgen Inc and New Providence Acquisition, you can compare the effects of market volatilities on Amgen and New Providence 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 New Providence. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amgen and New Providence.
Diversification Opportunities for Amgen and New Providence
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Amgen and New is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Amgen Inc and New Providence Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on New Providence Acqui 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 New Providence. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of New Providence Acqui has no effect on the direction of Amgen i.e., Amgen and New Providence go up and down completely randomly.
Pair Corralation between Amgen and New Providence
If you would invest 1,220 in New Providence Acquisition on September 13, 2024 and sell it today you would earn a total of 0.00 from holding New Providence Acquisition or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 4.76% |
| Values | Daily Returns |
Amgen Inc vs. New Providence Acquisition
Performance |
| Timeline |
| Amgen Inc |
| New Providence Acqui |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Amgen and New Providence Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Amgen and New Providence
The main advantage of trading using opposite Amgen and New Providence positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amgen position performs unexpectedly, New Providence 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 New Providence will offset losses from the drop in New Providence's long position.| Amgen vs. Puma Biotechnology | Amgen vs. Iovance Biotherapeutics | Amgen vs. Sarepta Therapeutics | Amgen vs. Day One Biopharmaceuticals |
| New Providence vs. Amgen Inc | New Providence vs. Cardinal Health | New Providence vs. Microbot Medical | New Providence vs. Tandem Diabetes Care |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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