Correlation Between NewAmsterdam Pharma and Amgen
Can any of the company-specific risk be diversified away by investing in both NewAmsterdam Pharma 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 NewAmsterdam Pharma and Amgen into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NewAmsterdam Pharma and Amgen Inc, you can compare the effects of market volatilities on NewAmsterdam Pharma 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 NewAmsterdam Pharma with a short position of Amgen. Check out your portfolio center. Please also check ongoing floating volatility patterns of NewAmsterdam Pharma and Amgen.
Diversification Opportunities for NewAmsterdam Pharma and Amgen
-0.7 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between NewAmsterdam and Amgen is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding NewAmsterdam Pharma and Amgen Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amgen Inc and NewAmsterdam Pharma 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 NewAmsterdam Pharma 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 NewAmsterdam Pharma i.e., NewAmsterdam Pharma and Amgen go up and down completely randomly.
Pair Corralation between NewAmsterdam Pharma and Amgen
Given the investment horizon of 90 days NewAmsterdam Pharma is expected to generate 2.37 times more return on investment than Amgen. However, NewAmsterdam Pharma is 2.37 times more volatile than Amgen Inc. It trades about 0.16 of its potential returns per unit of risk. Amgen Inc is currently generating about -0.23 per unit of risk. If you would invest 1,702 in NewAmsterdam Pharma on September 1, 2024 and sell it today you would earn a total of 283.00 from holding NewAmsterdam Pharma or generate 16.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
NewAmsterdam Pharma vs. Amgen Inc
Performance |
| Timeline |
| NewAmsterdam Pharma |
| Amgen Inc |
NewAmsterdam Pharma and Amgen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NewAmsterdam Pharma and Amgen
The main advantage of trading using opposite NewAmsterdam Pharma and Amgen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NewAmsterdam Pharma 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.| NewAmsterdam Pharma vs. Monte Rosa Therapeutics | NewAmsterdam Pharma vs. Inventiva Sa | NewAmsterdam Pharma vs. Cullinan Oncology LLC | NewAmsterdam Pharma vs. Compass Therapeutics |
| Amgen vs. Tff Pharmaceuticals | Amgen vs. Eliem Therapeutics | Amgen vs. Inhibrx | Amgen vs. Enliven Therapeutics |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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