Correlation Between Amgen and Qualys
Can any of the company-specific risk be diversified away by investing in both Amgen and Qualys 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 Qualys into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Amgen Inc and Qualys Inc, you can compare the effects of market volatilities on Amgen and Qualys 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 Qualys. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amgen and Qualys.
Diversification Opportunities for Amgen and Qualys
Excellent diversification
The 3 months correlation between Amgen and Qualys is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Amgen Inc and Qualys Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Qualys Inc 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 Qualys. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Qualys Inc has no effect on the direction of Amgen i.e., Amgen and Qualys go up and down completely randomly.
Pair Corralation between Amgen and Qualys
Given the investment horizon of 90 days Amgen Inc is expected to under-perform the Qualys. But the stock apears to be less risky and, when comparing its historical volatility, Amgen Inc is 2.42 times less risky than Qualys. The stock trades about -0.23 of its potential returns per unit of risk. The Qualys Inc is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest 11,924 in Qualys Inc on September 1, 2024 and sell it today you would earn a total of 3,436 from holding Qualys Inc or generate 28.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Amgen Inc vs. Qualys Inc
Performance |
| Timeline |
| Amgen Inc |
| Qualys Inc |
Amgen and Qualys Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Amgen and Qualys
The main advantage of trading using opposite Amgen and Qualys positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amgen position performs unexpectedly, Qualys 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 Qualys will offset losses from the drop in Qualys' long position.| Amgen vs. Tff Pharmaceuticals | Amgen vs. Eliem Therapeutics | Amgen vs. Inhibrx | Amgen vs. Enliven Therapeutics |
| Qualys vs. Palo Alto Networks | Qualys vs. Uipath Inc | Qualys vs. Block Inc | Qualys vs. Adobe Systems Incorporated |
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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