Correlation Between Nasdaq and AMGEN
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By analyzing existing cross correlation between Nasdaq Inc and AMGEN INC, you can compare the effects of market volatilities on Nasdaq 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 Nasdaq with a short position of AMGEN. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nasdaq and AMGEN.
Diversification Opportunities for Nasdaq and AMGEN
Pay attention - limited upside
The 3 months correlation between Nasdaq and AMGEN is -0.8. Overlapping area represents the amount of risk that can be diversified away by holding Nasdaq Inc and AMGEN INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AMGEN INC and Nasdaq 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 Nasdaq Inc 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 Nasdaq i.e., Nasdaq and AMGEN go up and down completely randomly.
Pair Corralation between Nasdaq and AMGEN
Given the investment horizon of 90 days Nasdaq Inc is expected to generate 1.36 times more return on investment than AMGEN. However, Nasdaq is 1.36 times more volatile than AMGEN INC. It trades about 0.18 of its potential returns per unit of risk. AMGEN INC is currently generating about -0.02 per unit of risk. If you would invest 5,630 in Nasdaq Inc on September 1, 2024 and sell it today you would earn a total of 2,669 from holding Nasdaq Inc or generate 47.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 84.04% |
| Values | Daily Returns |
Nasdaq Inc vs. AMGEN INC
Performance |
| Timeline |
| Nasdaq Inc |
| AMGEN INC |
Nasdaq and AMGEN Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nasdaq and AMGEN
The main advantage of trading using opposite Nasdaq and AMGEN positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nasdaq 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 Nasdaq Inc 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.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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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