Correlation Between Bon Natural and Amgen
Can any of the company-specific risk be diversified away by investing in both Bon Natural 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 Bon Natural and Amgen into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bon Natural Life and Amgen Inc, you can compare the effects of market volatilities on Bon Natural 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 Bon Natural with a short position of Amgen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bon Natural and Amgen.
Diversification Opportunities for Bon Natural and Amgen
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Bon and Amgen is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Bon Natural Life and Amgen Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amgen Inc and Bon Natural 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 Bon Natural Life 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 Bon Natural i.e., Bon Natural and Amgen go up and down completely randomly.
Pair Corralation between Bon Natural and Amgen
Considering the 90-day investment horizon Bon Natural Life is expected to generate 2.14 times more return on investment than Amgen. However, Bon Natural is 2.14 times more volatile than Amgen Inc. It trades about 0.17 of its potential returns per unit of risk. Amgen Inc is currently generating about -0.14 per unit of risk. If you would invest 147.00 in Bon Natural Life on August 28, 2024 and sell it today you would earn a total of 22.00 from holding Bon Natural Life or generate 14.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bon Natural Life vs. Amgen Inc
Performance |
| Timeline |
| Bon Natural Life |
| Amgen Inc |
Bon Natural and Amgen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bon Natural and Amgen
The main advantage of trading using opposite Bon Natural and Amgen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bon Natural 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.| Bon Natural vs. Blue Star Foods | Bon Natural vs. Grand Havana | Bon Natural vs. Real Good Food | Bon Natural vs. Central Garden Pet |
| 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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