Correlation Between Centessa Pharmaceuticals and Amgen
Can any of the company-specific risk be diversified away by investing in both Centessa Pharmaceuticals 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 Centessa Pharmaceuticals and Amgen into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Centessa Pharmaceuticals PLC and Amgen Inc, you can compare the effects of market volatilities on Centessa Pharmaceuticals 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 Centessa Pharmaceuticals with a short position of Amgen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Centessa Pharmaceuticals and Amgen.
Diversification Opportunities for Centessa Pharmaceuticals and Amgen
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Centessa and Amgen is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Centessa Pharmaceuticals PLC and Amgen Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amgen Inc and Centessa Pharmaceuticals 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 Centessa Pharmaceuticals PLC 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 Centessa Pharmaceuticals i.e., Centessa Pharmaceuticals and Amgen go up and down completely randomly.
Pair Corralation between Centessa Pharmaceuticals and Amgen
Given the investment horizon of 90 days Centessa Pharmaceuticals PLC is expected to generate 1.64 times more return on investment than Amgen. However, Centessa Pharmaceuticals is 1.64 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 -0.21 per unit of risk. If you would invest 1,544 in Centessa Pharmaceuticals PLC on August 30, 2024 and sell it today you would earn a total of 216.00 from holding Centessa Pharmaceuticals PLC or generate 13.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Centessa Pharmaceuticals PLC vs. Amgen Inc
Performance |
| Timeline |
| Centessa Pharmaceuticals |
| Amgen Inc |
Centessa Pharmaceuticals and Amgen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Centessa Pharmaceuticals and Amgen
The main advantage of trading using opposite Centessa Pharmaceuticals and Amgen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Centessa Pharmaceuticals 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.| Centessa Pharmaceuticals vs. Ikena Oncology | Centessa Pharmaceuticals vs. Eliem Therapeutics | Centessa Pharmaceuticals vs. HCW Biologics | Centessa Pharmaceuticals vs. RenovoRx |
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 Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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