Correlation Between VirnetX Holding and Amgen
Can any of the company-specific risk be diversified away by investing in both VirnetX Holding 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 VirnetX Holding and Amgen into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between VirnetX Holding Corp and Amgen Inc, you can compare the effects of market volatilities on VirnetX Holding 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 VirnetX Holding with a short position of Amgen. Check out your portfolio center. Please also check ongoing floating volatility patterns of VirnetX Holding and Amgen.
Diversification Opportunities for VirnetX Holding and Amgen
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between VirnetX and Amgen is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding VirnetX Holding Corp and Amgen Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amgen Inc and VirnetX Holding 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 VirnetX Holding Corp 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 VirnetX Holding i.e., VirnetX Holding and Amgen go up and down completely randomly.
Pair Corralation between VirnetX Holding and Amgen
Considering the 90-day investment horizon VirnetX Holding Corp is expected to under-perform the Amgen. In addition to that, VirnetX Holding is 3.89 times more volatile than Amgen Inc. It trades about -0.02 of its total potential returns per unit of risk. Amgen Inc is currently generating about 0.02 per unit of volatility. If you would invest 25,966 in Amgen Inc on September 2, 2024 and sell it today you would earn a total of 2,321 from holding Amgen Inc or generate 8.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
VirnetX Holding Corp vs. Amgen Inc
Performance |
| Timeline |
| VirnetX Holding Corp |
| Amgen Inc |
VirnetX Holding and Amgen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with VirnetX Holding and Amgen
The main advantage of trading using opposite VirnetX Holding and Amgen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VirnetX Holding 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.| VirnetX Holding vs. Palo Alto Networks | VirnetX Holding vs. GigaCloud Technology Class | VirnetX Holding vs. Pagaya Technologies | VirnetX Holding vs. Telos Corp |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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