Correlation Between Amgen and KRAFT
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By analyzing existing cross correlation between Amgen Inc and KRAFT HEINZ FOODS, you can compare the effects of market volatilities on Amgen and KRAFT 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 KRAFT. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amgen and KRAFT.
Diversification Opportunities for Amgen and KRAFT
Very weak diversification
The 3 months correlation between Amgen and KRAFT is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Amgen Inc and KRAFT HEINZ FOODS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KRAFT HEINZ FOODS 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 KRAFT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KRAFT HEINZ FOODS has no effect on the direction of Amgen i.e., Amgen and KRAFT go up and down completely randomly.
Pair Corralation between Amgen and KRAFT
Given the investment horizon of 90 days Amgen Inc is expected to under-perform the KRAFT. In addition to that, Amgen is 4.66 times more volatile than KRAFT HEINZ FOODS. It trades about -0.15 of its total potential returns per unit of risk. KRAFT HEINZ FOODS is currently generating about -0.04 per unit of volatility. If you would invest 9,947 in KRAFT HEINZ FOODS on October 23, 2024 and sell it today you would lose (50.00) from holding KRAFT HEINZ FOODS or give up 0.5% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 97.44% |
| Values | Daily Returns |
Amgen Inc vs. KRAFT HEINZ FOODS
Performance |
| Timeline |
| Amgen Inc |
| KRAFT HEINZ FOODS |
Amgen and KRAFT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Amgen and KRAFT
The main advantage of trading using opposite Amgen and KRAFT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amgen position performs unexpectedly, KRAFT 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 KRAFT will offset losses from the drop in KRAFT's long position.The idea behind Amgen Inc and KRAFT HEINZ FOODS 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.| KRAFT vs. ServiceNow | KRAFT vs. Amgen Inc | KRAFT vs. Merit Medical Systems | KRAFT vs. SmartStop Self Storage |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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