Correlation Between Amgen and Under Armour
Can any of the company-specific risk be diversified away by investing in both Amgen and Under Armour 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 Under Armour into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Amgen Inc and Under Armour C, you can compare the effects of market volatilities on Amgen and Under Armour 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 Under Armour. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amgen and Under Armour.
Diversification Opportunities for Amgen and Under Armour
-0.63 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Amgen and Under is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Amgen Inc and Under Armour C in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Under Armour C 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 Under Armour. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Under Armour C has no effect on the direction of Amgen i.e., Amgen and Under Armour go up and down completely randomly.
Pair Corralation between Amgen and Under Armour
Given the investment horizon of 90 days Amgen Inc is expected to under-perform the Under Armour. But the stock apears to be less risky and, when comparing its historical volatility, Amgen Inc is 2.57 times less risky than Under Armour. The stock trades about -0.14 of its potential returns per unit of risk. The Under Armour C is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 808.00 in Under Armour C on September 3, 2024 and sell it today you would earn a total of 69.00 from holding Under Armour C or generate 8.54% 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. Under Armour C
Performance |
| Timeline |
| Amgen Inc |
| Under Armour C |
Amgen and Under Armour Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Amgen and Under Armour
The main advantage of trading using opposite Amgen and Under Armour positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amgen position performs unexpectedly, Under Armour 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 Under Armour will offset losses from the drop in Under Armour's long position.| Amgen vs. Pfizer Inc | Amgen vs. Johnson Johnson | Amgen vs. Highway Holdings Limited | Amgen vs. QCR Holdings |
| Under Armour vs. Levi Strauss Co | Under Armour vs. Columbia Sportswear | Under Armour vs. Hanesbrands | Under Armour vs. PVH 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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