Correlation Between SIDETRADE and Amgen

Can any of the company-specific risk be diversified away by investing in both SIDETRADE 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 SIDETRADE and Amgen into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between SIDETRADE EO 1 and Amgen Inc, you can compare the effects of market volatilities on SIDETRADE 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 SIDETRADE with a short position of Amgen. Check out your portfolio center. Please also check ongoing floating volatility patterns of SIDETRADE and Amgen.

Diversification Opportunities for SIDETRADE and Amgen

0.91

Correlation Coefficient

SIDETRADE  Amgen

Almost no diversification

The 3 months correlation between SIDETRADE and Amgen is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding SIDETRADE EO 1 and Amgen Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amgen Inc and SIDETRADE 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 SIDETRADE EO 1 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 SIDETRADE i.e., SIDETRADE and Amgen go up and down completely randomly.

Pair Corralation between SIDETRADE and Amgen

Assuming the 90 days horizon SIDETRADE EO 1 is expected to generate 1.99 times more return on investment than Amgen. However, SIDETRADE is 1.99 times more volatile than Amgen Inc. It trades about 0.11 of its potential returns per unit of risk. Amgen Inc is currently generating about 0.19 per unit of risk. If you would invest  22,100  in SIDETRADE EO 1 on December 21, 2024 and sell it today you would earn a total of  3,800  from holding SIDETRADE EO 1 or generate 17.19% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	100.0%
Values	Daily Returns

SIDETRADE EO 1  vs.  Amgen Inc

SIDETRADE EO 1

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in SIDETRADE EO 1 are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, SIDETRADE reported solid returns over the last few months and may actually be approaching a breakup point.

Amgen Inc

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Amgen Inc are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of very uncertain technical and fundamental indicators, Amgen displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with SIDETRADE and Amgen

The main advantage of trading using opposite SIDETRADE and Amgen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SIDETRADE 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 SIDETRADE EO 1 and Amgen Inc 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.