Correlation Between Amgen and AGNC INVESTMENT

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Can any of the company-specific risk be diversified away by investing in both Amgen and AGNC INVESTMENT 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 AGNC INVESTMENT into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Amgen Inc and AGNC INVESTMENT, you can compare the effects of market volatilities on Amgen and AGNC INVESTMENT 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 AGNC INVESTMENT. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amgen and AGNC INVESTMENT.

Diversification Opportunities for Amgen and AGNC INVESTMENT

-0.29
  Correlation Coefficient

Very good diversification

The 3 months correlation between Amgen and AGNC is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Amgen Inc and AGNC INVESTMENT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AGNC INVESTMENT 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 AGNC INVESTMENT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AGNC INVESTMENT has no effect on the direction of Amgen i.e., Amgen and AGNC INVESTMENT go up and down completely randomly.

Pair Corralation between Amgen and AGNC INVESTMENT

Assuming the 90 days trading horizon Amgen Inc is expected to under-perform the AGNC INVESTMENT. In addition to that, Amgen is 2.45 times more volatile than AGNC INVESTMENT. It trades about -0.17 of its total potential returns per unit of risk. AGNC INVESTMENT is currently generating about 0.05 per unit of volatility. If you would invest  880.00  in AGNC INVESTMENT on October 10, 2024 and sell it today you would earn a total of  15.00  from holding AGNC INVESTMENT or generate 1.7% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy97.37%
ValuesDaily Returns

Amgen Inc  vs.  AGNC INVESTMENT

 Performance 
       Timeline  
Amgen Inc 

Risk-Adjusted Performance

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Weak
 
Strong
Very Weak
Over the last 90 days Amgen Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's technical and fundamental indicators remain very healthy which may send shares a bit higher in February 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.
AGNC INVESTMENT 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days AGNC INVESTMENT has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, AGNC INVESTMENT is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Amgen and AGNC INVESTMENT Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Amgen and AGNC INVESTMENT

The main advantage of trading using opposite Amgen and AGNC INVESTMENT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amgen position performs unexpectedly, AGNC INVESTMENT 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 AGNC INVESTMENT will offset losses from the drop in AGNC INVESTMENT's long position.
The idea behind Amgen Inc and AGNC INVESTMENT 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.

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