Correlation Between NioCorp Developments and Amgen
Can any of the company-specific risk be diversified away by investing in both NioCorp Developments 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 NioCorp Developments and Amgen into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NioCorp Developments Ltd and Amgen Inc, you can compare the effects of market volatilities on NioCorp Developments 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 NioCorp Developments with a short position of Amgen. Check out your portfolio center. Please also check ongoing floating volatility patterns of NioCorp Developments and Amgen.
Diversification Opportunities for NioCorp Developments and Amgen
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between NioCorp and Amgen is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding NioCorp Developments Ltd and Amgen Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amgen Inc and NioCorp Developments 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 NioCorp Developments Ltd 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 NioCorp Developments i.e., NioCorp Developments and Amgen go up and down completely randomly.
Pair Corralation between NioCorp Developments and Amgen
Allowing for the 90-day total investment horizon NioCorp Developments Ltd is expected to generate 25.66 times more return on investment than Amgen. However, NioCorp Developments is 25.66 times more volatile than Amgen Inc. It trades about 0.04 of its potential returns per unit of risk. Amgen Inc is currently generating about 0.02 per unit of risk. If you would invest 80.00 in NioCorp Developments Ltd on September 3, 2024 and sell it today you would earn a total of 53.00 from holding NioCorp Developments Ltd or generate 66.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
NioCorp Developments Ltd vs. Amgen Inc
Performance |
| Timeline |
| NioCorp Developments |
| Amgen Inc |
NioCorp Developments and Amgen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NioCorp Developments and Amgen
The main advantage of trading using opposite NioCorp Developments and Amgen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NioCorp Developments 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.| NioCorp Developments vs. Summit Materials | NioCorp Developments vs. Westrock Coffee | NioCorp Developments vs. Aldel Financial II | NioCorp Developments vs. Keurig Dr Pepper |
| Amgen vs. Pfizer Inc | Amgen vs. Johnson Johnson | Amgen vs. Highway Holdings Limited | Amgen vs. QCR Holdings |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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