Correlation Between Minerals Technologies and Amgen
Can any of the company-specific risk be diversified away by investing in both Minerals Technologies 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 Minerals Technologies and Amgen into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Minerals Technologies and Amgen Inc, you can compare the effects of market volatilities on Minerals Technologies 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 Minerals Technologies with a short position of Amgen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Minerals Technologies and Amgen.
Diversification Opportunities for Minerals Technologies and Amgen
-0.69 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Minerals and Amgen is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Minerals Technologies and Amgen Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amgen Inc and Minerals Technologies 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 Minerals Technologies 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 Minerals Technologies i.e., Minerals Technologies and Amgen go up and down completely randomly.
Pair Corralation between Minerals Technologies and Amgen
Considering the 90-day investment horizon Minerals Technologies is expected to generate 1.1 times more return on investment than Amgen. However, Minerals Technologies is 1.1 times more volatile than Amgen Inc. It trades about 0.07 of its potential returns per unit of risk. Amgen Inc is currently generating about 0.06 per unit of risk. If you would invest 5,558 in Minerals Technologies on September 2, 2024 and sell it today you would earn a total of 2,599 from holding Minerals Technologies or generate 46.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Minerals Technologies vs. Amgen Inc
Performance |
| Timeline |
| Minerals Technologies |
| Amgen Inc |
Minerals Technologies and Amgen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Minerals Technologies and Amgen
The main advantage of trading using opposite Minerals Technologies and Amgen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Minerals Technologies 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.| Minerals Technologies vs. Linde plc Ordinary | Minerals Technologies vs. Air Products and | Minerals Technologies vs. Aquagold International | Minerals Technologies vs. Thrivent High Yield |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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