Correlation Between Oasis Petroleum and Amgen
Can any of the company-specific risk be diversified away by investing in both Oasis Petroleum 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 Oasis Petroleum and Amgen into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Oasis Petroleum and Amgen Inc, you can compare the effects of market volatilities on Oasis Petroleum 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 Oasis Petroleum with a short position of Amgen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oasis Petroleum and Amgen.
Diversification Opportunities for Oasis Petroleum and Amgen
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Oasis and Amgen is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Oasis Petroleum and Amgen Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amgen Inc and Oasis Petroleum 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 Oasis Petroleum 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 Oasis Petroleum i.e., Oasis Petroleum and Amgen go up and down completely randomly.
Pair Corralation between Oasis Petroleum and Amgen
Assuming the 90 days horizon Oasis Petroleum is expected to under-perform the Amgen. In addition to that, Oasis Petroleum is 1.65 times more volatile than Amgen Inc. It trades about -0.07 of its total potential returns per unit of risk. Amgen Inc is currently generating about 0.01 per unit of volatility. If you would invest 26,740 in Amgen Inc on September 12, 2024 and sell it today you would earn a total of 625.00 from holding Amgen Inc or generate 2.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 93.95% |
| Values | Daily Returns |
Oasis Petroleum vs. Amgen Inc
Performance |
| Timeline |
| Oasis Petroleum |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Amgen Inc |
Oasis Petroleum and Amgen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Oasis Petroleum and Amgen
The main advantage of trading using opposite Oasis Petroleum and Amgen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Oasis Petroleum 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.| Oasis Petroleum vs. Amgen Inc | Oasis Petroleum vs. IPG Photonics | Oasis Petroleum vs. Alvotech | Oasis Petroleum vs. Amkor Technology |
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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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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