Correlation Between Amgen and Nukkleus
Can any of the company-specific risk be diversified away by investing in both Amgen and Nukkleus 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 Nukkleus into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Amgen Inc and Nukkleus, you can compare the effects of market volatilities on Amgen and Nukkleus 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 Nukkleus. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amgen and Nukkleus.
Diversification Opportunities for Amgen and Nukkleus
Significant diversification
The 3 months correlation between Amgen and Nukkleus is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Amgen Inc and Nukkleus in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nukkleus 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 Nukkleus. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nukkleus has no effect on the direction of Amgen i.e., Amgen and Nukkleus go up and down completely randomly.
Pair Corralation between Amgen and Nukkleus
Given the investment horizon of 90 days Amgen Inc is expected to under-perform the Nukkleus. But the stock apears to be less risky and, when comparing its historical volatility, Amgen Inc is 42.49 times less risky than Nukkleus. The stock trades about -0.08 of its potential returns per unit of risk. The Nukkleus is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 3.01 in Nukkleus on November 2, 2024 and sell it today you would earn a total of 17.99 from holding Nukkleus or generate 597.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Amgen Inc vs. Nukkleus
Performance |
| Timeline |
| Amgen Inc |
| Nukkleus |
Amgen and Nukkleus Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Amgen and Nukkleus
The main advantage of trading using opposite Amgen and Nukkleus positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amgen position performs unexpectedly, Nukkleus 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 Nukkleus will offset losses from the drop in Nukkleus' long position.The idea behind Amgen Inc and Nukkleus pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Nukkleus vs. Copperbank Resources Corp | Nukkleus vs. Insteel Industries | Nukkleus vs. Highway Holdings Limited | Nukkleus vs. Barrick Gold 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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