Correlation Between Mills Music and AMGEN

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Can any of the company-specific risk be diversified away by investing in both Mills Music 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 Mills Music and AMGEN into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mills Music Trust and AMGEN INC, you can compare the effects of market volatilities on Mills Music 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 Mills Music with a short position of AMGEN. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mills Music and AMGEN.

Diversification Opportunities for Mills Music and AMGEN

-0.51
  Correlation Coefficient

Excellent diversification

The 3 months correlation between Mills and AMGEN is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Mills Music Trust and AMGEN INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AMGEN INC and Mills Music 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 Mills Music Trust 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 Mills Music i.e., Mills Music and AMGEN go up and down completely randomly.

Pair Corralation between Mills Music and AMGEN

Assuming the 90 days horizon Mills Music Trust is expected to generate 0.57 times more return on investment than AMGEN. However, Mills Music Trust is 1.76 times less risky than AMGEN. It trades about 0.16 of its potential returns per unit of risk. AMGEN INC is currently generating about -0.07 per unit of risk. If you would invest  3,652  in Mills Music Trust on September 13, 2024 and sell it today you would earn a total of  218.00  from holding Mills Music Trust or generate 5.97% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthVery Weak
Accuracy95.24%
ValuesDaily Returns

Mills Music Trust  vs.  AMGEN INC

 Performance 
       Timeline  
Mills Music Trust 

Risk-Adjusted Performance

3 of 100

 
Weak
 
Strong
Insignificant
Compared to the overall equity markets, risk-adjusted returns on investments in Mills Music Trust are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Mills Music may actually be approaching a critical reversion point that can send shares even higher in January 2025.
AMGEN INC 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days AMGEN INC has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, AMGEN is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Mills Music and AMGEN Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Mills Music and AMGEN

The main advantage of trading using opposite Mills Music and AMGEN positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mills Music 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.
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The idea behind Mills Music Trust 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.
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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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.

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