Correlation Between Franklin Street and Amgen
Can any of the company-specific risk be diversified away by investing in both Franklin Street 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 Franklin Street and Amgen into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Franklin Street Properties and Amgen Inc, you can compare the effects of market volatilities on Franklin Street 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 Franklin Street with a short position of Amgen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Street and Amgen.
Diversification Opportunities for Franklin Street and Amgen
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Franklin and Amgen is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Street Properties and Amgen Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amgen Inc and Franklin Street 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 Franklin Street Properties 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 Franklin Street i.e., Franklin Street and Amgen go up and down completely randomly.
Pair Corralation between Franklin Street and Amgen
Considering the 90-day investment horizon Franklin Street Properties is expected to generate 1.73 times more return on investment than Amgen. However, Franklin Street is 1.73 times more volatile than Amgen Inc. It trades about 0.11 of its potential returns per unit of risk. Amgen Inc is currently generating about -0.14 per unit of risk. If you would invest 180.00 in Franklin Street Properties on August 27, 2024 and sell it today you would earn a total of 14.00 from holding Franklin Street Properties or generate 7.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Franklin Street Properties vs. Amgen Inc
Performance |
| Timeline |
| Franklin Street Prop |
| Amgen Inc |
Franklin Street and Amgen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Street and Amgen
The main advantage of trading using opposite Franklin Street and Amgen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Street 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.| Franklin Street vs. Equity Commonwealth | Franklin Street vs. Cousins Properties Incorporated | Franklin Street vs. Creative Media Community | Franklin Street vs. Highwoods Properties |
| 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 Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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