Correlation Between Puma Biotechnology and Amgen
Can any of the company-specific risk be diversified away by investing in both Puma Biotechnology 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 Puma Biotechnology and Amgen into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Puma Biotechnology and Amgen Inc, you can compare the effects of market volatilities on Puma Biotechnology 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 Puma Biotechnology with a short position of Amgen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Puma Biotechnology and Amgen.
Diversification Opportunities for Puma Biotechnology and Amgen
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Puma and Amgen is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Puma Biotechnology and Amgen Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amgen Inc and Puma Biotechnology 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 Puma Biotechnology 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 Puma Biotechnology i.e., Puma Biotechnology and Amgen go up and down completely randomly.
Pair Corralation between Puma Biotechnology and Amgen
Given the investment horizon of 90 days Puma Biotechnology is expected to generate 3.51 times more return on investment than Amgen. However, Puma Biotechnology is 3.51 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 -0.19 per unit of risk. If you would invest 321.00 in Puma Biotechnology on September 13, 2024 and sell it today you would lose (29.00) from holding Puma Biotechnology or give up 9.03% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Puma Biotechnology vs. Amgen Inc
Performance |
| Timeline |
| Puma Biotechnology |
| Amgen Inc |
Puma Biotechnology and Amgen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Puma Biotechnology and Amgen
The main advantage of trading using opposite Puma Biotechnology and Amgen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Puma Biotechnology 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.| Puma Biotechnology vs. Ultragenyx | Puma Biotechnology vs. Crinetics Pharmaceuticals | Puma Biotechnology vs. Arvinas | Puma Biotechnology vs. Revolution Medicines |
| Amgen vs. Puma Biotechnology | Amgen vs. Iovance Biotherapeutics | Amgen vs. Sarepta Therapeutics | Amgen vs. Day One Biopharmaceuticals |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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