Correlation Between HUT 8 and Amgen
Can any of the company-specific risk be diversified away by investing in both HUT 8 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 HUT 8 and Amgen into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between HUT 8 P and Amgen Inc, you can compare the effects of market volatilities on HUT 8 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 HUT 8 with a short position of Amgen. Check out your portfolio center. Please also check ongoing floating volatility patterns of HUT 8 and Amgen.
Diversification Opportunities for HUT 8 and Amgen
Excellent diversification
The 3 months correlation between HUT and Amgen is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding HUT 8 P and Amgen Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amgen Inc and HUT 8 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 HUT 8 P 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 HUT 8 i.e., HUT 8 and Amgen go up and down completely randomly.
Pair Corralation between HUT 8 and Amgen
Assuming the 90 days horizon HUT 8 P is expected to generate 3.38 times more return on investment than Amgen. However, HUT 8 is 3.38 times more volatile than Amgen Inc. It trades about 0.3 of its potential returns per unit of risk. Amgen Inc is currently generating about -0.06 per unit of risk. If you would invest 1,070 in HUT 8 P on August 25, 2024 and sell it today you would earn a total of 1,240 from holding HUT 8 P or generate 115.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
HUT 8 P vs. Amgen Inc
Performance |
| Timeline |
| HUT 8 P |
| Amgen Inc |
HUT 8 and Amgen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HUT 8 and Amgen
The main advantage of trading using opposite HUT 8 and Amgen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HUT 8 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.| HUT 8 vs. CANON MARKETING JP | HUT 8 vs. Auto Trader Group | HUT 8 vs. Transportadora de Gas | HUT 8 vs. TITANIUM TRANSPORTGROUP |
| Amgen vs. Playtech plc | Amgen vs. Playa Hotels Resorts | Amgen vs. GREENX METALS LTD | Amgen vs. JD SPORTS FASH |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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