Correlation Between RadNet and Amgen
Can any of the company-specific risk be diversified away by investing in both RadNet 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 RadNet and Amgen into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between RadNet Inc and Amgen Inc, you can compare the effects of market volatilities on RadNet 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 RadNet with a short position of Amgen. Check out your portfolio center. Please also check ongoing floating volatility patterns of RadNet and Amgen.
Diversification Opportunities for RadNet and Amgen
Pay attention - limited upside
The 3 months correlation between RadNet and Amgen is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding RadNet Inc and Amgen Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amgen Inc and RadNet 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 RadNet 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 RadNet i.e., RadNet and Amgen go up and down completely randomly.
Pair Corralation between RadNet and Amgen
Given the investment horizon of 90 days RadNet Inc is expected to generate 1.73 times more return on investment than Amgen. However, RadNet is 1.73 times more volatile than Amgen Inc. It trades about 0.13 of its potential returns per unit of risk. Amgen Inc is currently generating about 0.02 per unit of risk. If you would invest 2,010 in RadNet Inc on September 3, 2024 and sell it today you would earn a total of 6,275 from holding RadNet Inc or generate 312.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
RadNet Inc vs. Amgen Inc
Performance |
| Timeline |
| RadNet Inc |
| Amgen Inc |
RadNet and Amgen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with RadNet and Amgen
The main advantage of trading using opposite RadNet and Amgen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if RadNet 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.| RadNet vs. Sotera Health Co | RadNet vs. Neogen | RadNet vs. Myriad Genetics | RadNet vs. bioAffinity Technologies Warrant |
| Amgen vs. Pfizer Inc | Amgen vs. Johnson Johnson | Amgen vs. Highway Holdings Limited | Amgen vs. QCR Holdings |
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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