Correlation Between Sinopec Shanghai and Amgen
Can any of the company-specific risk be diversified away by investing in both Sinopec Shanghai 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 Sinopec Shanghai and Amgen into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sinopec Shanghai Petrochemical and Amgen Inc, you can compare the effects of market volatilities on Sinopec Shanghai 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 Sinopec Shanghai with a short position of Amgen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sinopec Shanghai and Amgen.
Diversification Opportunities for Sinopec Shanghai and Amgen
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Sinopec and Amgen is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Sinopec Shanghai Petrochemical and Amgen Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amgen Inc and Sinopec Shanghai 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 Sinopec Shanghai Petrochemical 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 Sinopec Shanghai i.e., Sinopec Shanghai and Amgen go up and down completely randomly.
Pair Corralation between Sinopec Shanghai and Amgen
Assuming the 90 days trading horizon Sinopec Shanghai Petrochemical is expected to under-perform the Amgen. In addition to that, Sinopec Shanghai is 4.87 times more volatile than Amgen Inc. It trades about -0.08 of its total potential returns per unit of risk. Amgen Inc is currently generating about 0.31 per unit of volatility. If you would invest 25,235 in Amgen Inc on October 25, 2024 and sell it today you would earn a total of 1,080 from holding Amgen Inc or generate 4.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sinopec Shanghai Petrochemical vs. Amgen Inc
Performance |
| Timeline |
| Sinopec Shanghai Pet |
| Amgen Inc |
Sinopec Shanghai and Amgen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sinopec Shanghai and Amgen
The main advantage of trading using opposite Sinopec Shanghai and Amgen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sinopec Shanghai 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.| Sinopec Shanghai vs. Suntory Beverage Food | Sinopec Shanghai vs. Diamyd Medical AB | Sinopec Shanghai vs. National Beverage Corp | Sinopec Shanghai vs. Carnegie Clean Energy |
| Amgen vs. SYSTEMAIR AB | Amgen vs. CyberArk Software | Amgen vs. Fair Isaac Corp | Amgen vs. Wizz Air 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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