Correlation Between Beauty Health and AMGEN

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Can any of the company-specific risk be diversified away by investing in both Beauty Health 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 Beauty Health and AMGEN into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Beauty Health Co and AMGEN INC 64, you can compare the effects of market volatilities on Beauty Health 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 Beauty Health with a short position of AMGEN. Check out your portfolio center. Please also check ongoing floating volatility patterns of Beauty Health and AMGEN.

Diversification Opportunities for Beauty Health and AMGEN

-0.44
  Correlation Coefficient

Very good diversification

The 3 months correlation between Beauty and AMGEN is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Beauty Health Co and AMGEN INC 64 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AMGEN INC 64 and Beauty Health 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 Beauty Health Co 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 64 has no effect on the direction of Beauty Health i.e., Beauty Health and AMGEN go up and down completely randomly.

Pair Corralation between Beauty Health and AMGEN

Given the investment horizon of 90 days Beauty Health Co is expected to generate 3.66 times more return on investment than AMGEN. However, Beauty Health is 3.66 times more volatile than AMGEN INC 64. It trades about 0.0 of its potential returns per unit of risk. AMGEN INC 64 is currently generating about -0.07 per unit of risk. If you would invest  157.00  in Beauty Health Co on September 13, 2024 and sell it today you would lose (7.00) from holding Beauty Health Co or give up 4.46% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthVery Weak
Accuracy67.44%
ValuesDaily Returns

Beauty Health Co  vs.  AMGEN INC 64

 Performance 
       Timeline  
Beauty Health 

Risk-Adjusted Performance

2 of 100

 
Weak
 
Strong
Weak
Compared to the overall equity markets, risk-adjusted returns on investments in Beauty Health Co are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of very unsteady forward indicators, Beauty Health may actually be approaching a critical reversion point that can send shares even higher in January 2025.
AMGEN INC 64 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days AMGEN INC 64 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest inconsistent performance, the Bond's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for AMGEN INC 64 investors.

Beauty Health and AMGEN Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Beauty Health and AMGEN

The main advantage of trading using opposite Beauty Health and AMGEN positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Beauty Health 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 Beauty Health Co and AMGEN INC 64 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.
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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 CEOs Directory module to screen CEOs from public companies around the world.

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