Correlation Between Amgen and Grupo Carso

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

By analyzing existing cross correlation between Amgen Inc and Grupo Carso SAB, you can compare the effects of market volatilities on Amgen and Grupo Carso 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 Grupo Carso. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amgen and Grupo Carso.

Diversification Opportunities for Amgen and Grupo Carso

0.15

Correlation Coefficient

Amgen  Grupo Carso

Average diversification

The 3 months correlation between Amgen and Grupo is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Amgen Inc and Grupo Carso SAB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grupo Carso SAB 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 are associated (or correlated) with Grupo Carso. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grupo Carso SAB has no effect on the direction of Amgen i.e., Amgen and Grupo Carso go up and down completely randomly.

Pair Corralation between Amgen and Grupo Carso

Assuming the 90 days trading horizon Amgen Inc is expected to generate 0.71 times more return on investment than Grupo Carso. However, Amgen Inc is 1.42 times less risky than Grupo Carso. It trades about 0.16 of its potential returns per unit of risk. Grupo Carso SAB is currently generating about 0.02 per unit of risk. If you would invest  25,439  in Amgen Inc on December 20, 2024 and sell it today you would earn a total of  3,451  from holding Amgen Inc or generate 13.57% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	98.33%
Values	Daily Returns

Amgen Inc  vs.  Grupo Carso SAB

Amgen Inc

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Amgen Inc are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unfluctuating technical and fundamental indicators, Amgen sustained solid returns over the last few months and may actually be approaching a breakup point.

Grupo Carso SAB

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Grupo Carso SAB are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, Grupo Carso is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Amgen and Grupo Carso

The main advantage of trading using opposite Amgen and Grupo Carso positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amgen position performs unexpectedly, Grupo Carso 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 Grupo Carso will offset losses from the drop in Grupo Carso's long position.

The idea behind Amgen Inc and Grupo Carso SAB 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.