Correlation Between Amgen and XORTX Therapeutics
Can any of the company-specific risk be diversified away by investing in both Amgen and XORTX Therapeutics 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 XORTX Therapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Amgen Inc and XORTX Therapeutics, you can compare the effects of market volatilities on Amgen and XORTX Therapeutics 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 XORTX Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amgen and XORTX Therapeutics.
Diversification Opportunities for Amgen and XORTX Therapeutics
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Amgen and XORTX is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Amgen Inc and XORTX Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on XORTX Therapeutics 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 XORTX Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of XORTX Therapeutics has no effect on the direction of Amgen i.e., Amgen and XORTX Therapeutics go up and down completely randomly.
Pair Corralation between Amgen and XORTX Therapeutics
Given the investment horizon of 90 days Amgen Inc is expected to generate 0.13 times more return on investment than XORTX Therapeutics. However, Amgen Inc is 7.7 times less risky than XORTX Therapeutics. It trades about 0.02 of its potential returns per unit of risk. XORTX Therapeutics is currently generating about -0.01 per unit of risk. If you would invest 25,542 in Amgen Inc on September 3, 2024 and sell it today you would earn a total of 2,268 from holding Amgen Inc or generate 8.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Amgen Inc vs. XORTX Therapeutics
Performance |
| Timeline |
| Amgen Inc |
| XORTX Therapeutics |
Amgen and XORTX Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Amgen and XORTX Therapeutics
The main advantage of trading using opposite Amgen and XORTX Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amgen position performs unexpectedly, XORTX Therapeutics 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 XORTX Therapeutics will offset losses from the drop in XORTX Therapeutics' long position.| Amgen vs. Pfizer Inc | Amgen vs. Johnson Johnson | Amgen vs. Highway Holdings Limited | Amgen vs. QCR Holdings |
| XORTX Therapeutics vs. DiaMedica Therapeutics | XORTX Therapeutics vs. Lyra Therapeutics | XORTX Therapeutics vs. Centessa Pharmaceuticals PLC |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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