Correlation Between Lipocine and Amgen
Can any of the company-specific risk be diversified away by investing in both Lipocine 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 Lipocine and Amgen into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lipocine and Amgen Inc, you can compare the effects of market volatilities on Lipocine 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 Lipocine with a short position of Amgen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lipocine and Amgen.
Diversification Opportunities for Lipocine and Amgen
Very good diversification
The 3 months correlation between Lipocine and Amgen is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Lipocine and Amgen Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amgen Inc and Lipocine 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 Lipocine 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 Lipocine i.e., Lipocine and Amgen go up and down completely randomly.
Pair Corralation between Lipocine and Amgen
Given the investment horizon of 90 days Lipocine is expected to under-perform the Amgen. In addition to that, Lipocine is 2.75 times more volatile than Amgen Inc. It trades about -0.13 of its total potential returns per unit of risk. Amgen Inc is currently generating about -0.21 per unit of volatility. If you would invest 31,349 in Amgen Inc on August 30, 2024 and sell it today you would lose (3,342) from holding Amgen Inc or give up 10.66% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lipocine vs. Amgen Inc
Performance |
| Timeline |
| Lipocine |
| Amgen Inc |
Lipocine and Amgen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lipocine and Amgen
The main advantage of trading using opposite Lipocine and Amgen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lipocine 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.The idea behind Lipocine and Amgen Inc pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Amgen vs. Pharvaris BV | Amgen vs. Brinker International | Amgen vs. Alcoa Corp | Amgen vs. Direxion Daily FTSE |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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