Correlation Between Amgen and FEDEX
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By analyzing existing cross correlation between Amgen Inc and FEDEX P 405, you can compare the effects of market volatilities on Amgen and FEDEX 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 FEDEX. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amgen and FEDEX.
Diversification Opportunities for Amgen and FEDEX
Very weak diversification
The 3 months correlation between Amgen and FEDEX is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Amgen Inc and FEDEX P 405 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FEDEX P 405 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 FEDEX. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FEDEX P 405 has no effect on the direction of Amgen i.e., Amgen and FEDEX go up and down completely randomly.
Pair Corralation between Amgen and FEDEX
Given the investment horizon of 90 days Amgen Inc is expected to generate 0.71 times more return on investment than FEDEX. However, Amgen Inc is 1.4 times less risky than FEDEX. It trades about 0.42 of its potential returns per unit of risk. FEDEX P 405 is currently generating about 0.18 per unit of risk. If you would invest 25,928 in Amgen Inc on November 3, 2024 and sell it today you would earn a total of 2,614 from holding Amgen Inc or generate 10.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 90.0% |
| Values | Daily Returns |
Amgen Inc vs. FEDEX P 405
Performance |
| Timeline |
| Amgen Inc |
| FEDEX P 405 |
Amgen and FEDEX Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Amgen and FEDEX
The main advantage of trading using opposite Amgen and FEDEX positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amgen position performs unexpectedly, FEDEX 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 FEDEX will offset losses from the drop in FEDEX's long position.The idea behind Amgen Inc and FEDEX P 405 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.| FEDEX vs. WK Kellogg Co | FEDEX vs. Sun Country Airlines | FEDEX vs. Paranovus Entertainment Technology | FEDEX vs. Black Mammoth Metals |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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