Correlation Between Park Ohio and Amgen
Can any of the company-specific risk be diversified away by investing in both Park Ohio 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 Park Ohio and Amgen into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Park Ohio Holdings and Amgen Inc, you can compare the effects of market volatilities on Park Ohio 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 Park Ohio with a short position of Amgen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Park Ohio and Amgen.
Diversification Opportunities for Park Ohio and Amgen
Excellent diversification
The 3 months correlation between Park and Amgen is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding Park Ohio Holdings and Amgen Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amgen Inc and Park Ohio 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 Park Ohio Holdings 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 Park Ohio i.e., Park Ohio and Amgen go up and down completely randomly.
Pair Corralation between Park Ohio and Amgen
Given the investment horizon of 90 days Park Ohio Holdings is expected to generate 1.61 times more return on investment than Amgen. However, Park Ohio is 1.61 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 -0.23 per unit of risk. If you would invest 2,836 in Park Ohio Holdings on September 1, 2024 and sell it today you would earn a total of 381.00 from holding Park Ohio Holdings or generate 13.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Park Ohio Holdings vs. Amgen Inc
Performance |
| Timeline |
| Park Ohio Holdings |
| Amgen Inc |
Park Ohio and Amgen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Park Ohio and Amgen
The main advantage of trading using opposite Park Ohio and Amgen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Park Ohio 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.| Park Ohio vs. Hurco Companies | Park Ohio vs. Enerpac Tool Group | Park Ohio vs. China Yuchai International | Park Ohio vs. Luxfer Holdings PLC |
| Amgen vs. Tff Pharmaceuticals | Amgen vs. Eliem Therapeutics | Amgen vs. Inhibrx | Amgen vs. Enliven Therapeutics |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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