Correlation Between Repligen and Amgen

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Can any of the company-specific risk be diversified away by investing in both Repligen 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 Repligen and Amgen into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Repligen and Amgen Inc, you can compare the effects of market volatilities on Repligen 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 Repligen with a short position of Amgen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Repligen and Amgen.

Diversification Opportunities for Repligen and Amgen

0.28
  Correlation Coefficient

Modest diversification

The 3 months correlation between Repligen and Amgen is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Repligen and Amgen Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amgen Inc and Repligen 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 Repligen 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 Repligen i.e., Repligen and Amgen go up and down completely randomly.

Pair Corralation between Repligen and Amgen

Given the investment horizon of 90 days Repligen is expected to generate 1.83 times more return on investment than Amgen. However, Repligen is 1.83 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 -0.21 per unit of risk. If you would invest  13,487  in Repligen on August 30, 2024 and sell it today you would earn a total of  1,512  from holding Repligen or generate 11.21% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

Repligen  vs.  Amgen Inc

 Performance 
       Timeline  
Repligen 

Risk-Adjusted Performance

1 of 100

 
Weak
 
Strong
Weak
Compared to the overall equity markets, risk-adjusted returns on investments in Repligen are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy technical and fundamental indicators, Repligen is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.
Amgen Inc 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Amgen Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's technical and fundamental indicators remain very healthy which may send shares a bit higher in December 2024. The recent disarray may also be a sign of long period up-swing for the firm investors.

Repligen and Amgen Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Repligen and Amgen

The main advantage of trading using opposite Repligen and Amgen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Repligen 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.
The idea behind Repligen and Amgen Inc pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.

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