Correlation Between Bayer AG and Amgen
Can any of the company-specific risk be diversified away by investing in both Bayer AG and Amgen 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 Bayer AG and Amgen into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bayer AG PK and Amgen Inc, you can compare the effects of market volatilities on Bayer AG and Amgen 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 Bayer AG with a short position of Amgen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bayer AG and Amgen.
Diversification Opportunities for Bayer AG and Amgen
Very good diversification
The 3 months correlation between Bayer and Amgen is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Bayer AG PK and Amgen Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amgen Inc and Bayer AG 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 Bayer AG PK are associated (or correlated) with Amgen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amgen Inc has no effect on the direction of Bayer AG i.e., Bayer AG and Amgen go up and down completely randomly.
Pair Corralation between Bayer AG and Amgen
If you would invest 21,197 in Amgen Inc on August 27, 2024 and sell it today you would earn a total of 8,256 from holding Amgen Inc or generate 38.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 0.27% |
| Values | Daily Returns |
Bayer AG PK vs. Amgen Inc
Performance |
| Timeline |
| Bayer AG PK |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Amgen Inc |
Bayer AG and Amgen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bayer AG and Amgen
The main advantage of trading using opposite Bayer AG and Amgen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bayer AG position performs unexpectedly, Amgen 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 Amgen will offset losses from the drop in Amgen's long position.| Bayer AG vs. Novartis AG ADR | Bayer AG vs. Sanofi ADR | Bayer AG vs. AstraZeneca PLC ADR | Bayer AG vs. GlaxoSmithKline PLC ADR |
| Amgen vs. Eliem Therapeutics | Amgen vs. HCW Biologics | Amgen vs. Scpharmaceuticals | Amgen vs. Milestone Pharmaceuticals |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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