Correlation Between AMGEN and Dow Jones
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By analyzing existing cross correlation between AMGEN INC 3125 and Dow Jones Industrial, you can compare the effects of market volatilities on AMGEN and Dow Jones 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 AMGEN with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of AMGEN and Dow Jones.
Diversification Opportunities for AMGEN and Dow Jones
Very good diversification
The 3 months correlation between AMGEN and Dow is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding AMGEN INC 3125 and Dow Jones Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dow Jones Industrial and AMGEN 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 AMGEN INC 3125 are associated (or correlated) with Dow Jones. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dow Jones Industrial has no effect on the direction of AMGEN i.e., AMGEN and Dow Jones go up and down completely randomly.
Pair Corralation between AMGEN and Dow Jones
Assuming the 90 days trading horizon AMGEN INC 3125 is expected to under-perform the Dow Jones. But the bond apears to be less risky and, when comparing its historical volatility, AMGEN INC 3125 is 2.84 times less risky than Dow Jones. The bond trades about -0.19 of its potential returns per unit of risk. The Dow Jones Industrial is currently generating about 0.25 of returns per unit of risk over similar time horizon. If you would invest 4,238,757 in Dow Jones Industrial on August 29, 2024 and sell it today you would earn a total of 233,449 from holding Dow Jones Industrial or generate 5.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
AMGEN INC 3125 vs. Dow Jones Industrial
Performance |
| Timeline |
AMGEN and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
AMGEN INC 3125
Pair trading matchups for AMGEN
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with AMGEN and Dow Jones
The main advantage of trading using opposite AMGEN and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AMGEN position performs unexpectedly, Dow Jones 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 Dow Jones will offset losses from the drop in Dow Jones' long position.The idea behind AMGEN INC 3125 and Dow Jones Industrial 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.| Dow Jones vs. Kaltura | Dow Jones vs. Artisan Partners Asset | Dow Jones vs. US Global Investors | Dow Jones vs. Analog Devices |
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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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