Correlation Between COPLAND ROAD and Amgen

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

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

Diversification Opportunities for COPLAND ROAD and Amgen

0.84

Correlation Coefficient

COPLAND ROAD  Amgen

Very poor diversification

The 3 months correlation between COPLAND and Amgen is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding COPLAND ROAD CAPITAL and Amgen Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amgen Inc and COPLAND ROAD 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 COPLAND ROAD CAPITAL 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 COPLAND ROAD i.e., COPLAND ROAD and Amgen go up and down completely randomly.

Pair Corralation between COPLAND ROAD and Amgen

Assuming the 90 days horizon COPLAND ROAD CAPITAL is expected to generate 2.65 times more return on investment than Amgen. However, COPLAND ROAD is 2.65 times more volatile than Amgen Inc. It trades about 0.15 of its potential returns per unit of risk. Amgen Inc is currently generating about 0.19 per unit of risk. If you would invest  3,747  in COPLAND ROAD CAPITAL on December 21, 2024 and sell it today you would earn a total of  1,173  from holding COPLAND ROAD CAPITAL or generate 31.31% return on investment over 90 days.

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

COPLAND ROAD CAPITAL  vs.  Amgen Inc

COPLAND ROAD CAPITAL

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in COPLAND ROAD CAPITAL are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, COPLAND ROAD 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 14 (%) of all global equities and portfolios over the last 90 days. Despite somewhat fragile technical and fundamental indicators, Amgen sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with COPLAND ROAD and Amgen

The main advantage of trading using opposite COPLAND ROAD and Amgen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if COPLAND ROAD 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 COPLAND ROAD CAPITAL 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.