Correlation Between NVIDIA and Amgen
Can any of the company-specific risk be diversified away by investing in both NVIDIA 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 NVIDIA and Amgen into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NVIDIA and Amgen Inc, you can compare the effects of market volatilities on NVIDIA 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 NVIDIA with a short position of Amgen. Check out your portfolio center. Please also check ongoing floating volatility patterns of NVIDIA and Amgen.
Diversification Opportunities for NVIDIA and Amgen
Excellent diversification
The 3 months correlation between NVIDIA and Amgen is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding NVIDIA and Amgen Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amgen Inc and NVIDIA 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 NVIDIA 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 NVIDIA i.e., NVIDIA and Amgen go up and down completely randomly.
Pair Corralation between NVIDIA and Amgen
Given the investment horizon of 90 days NVIDIA is expected to generate 1.95 times more return on investment than Amgen. However, NVIDIA is 1.95 times more volatile than Amgen Inc. It trades about 0.12 of its potential returns per unit of risk. Amgen Inc is currently generating about 0.05 per unit of risk. If you would invest 4,550 in NVIDIA on September 12, 2024 and sell it today you would earn a total of 8,957 from holding NVIDIA or generate 196.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
NVIDIA vs. Amgen Inc
Performance |
| Timeline |
| NVIDIA |
| Amgen Inc |
NVIDIA and Amgen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NVIDIA and Amgen
The main advantage of trading using opposite NVIDIA and Amgen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NVIDIA 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.| NVIDIA vs. Intel | NVIDIA vs. Taiwan Semiconductor Manufacturing | NVIDIA vs. Marvell Technology Group | NVIDIA vs. Micron Technology |
| Amgen vs. Victory Integrity Smallmid Cap | Amgen vs. Hilton Worldwide Holdings | Amgen vs. NVIDIA | Amgen vs. JPMorgan Chase Co |
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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
Other Complementary Tools
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum |