Correlation Between Amgen and SANOK RUBBER

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

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

Diversification Opportunities for Amgen and SANOK RUBBER

-0.54

Correlation Coefficient

Amgen  SANOK RUBBER

Excellent diversification

The 3 months correlation between Amgen and SANOK is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Amgen Inc and SANOK RUBBER ZY in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SANOK RUBBER ZY 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 SANOK RUBBER. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SANOK RUBBER ZY has no effect on the direction of Amgen i.e., Amgen and SANOK RUBBER go up and down completely randomly.

Pair Corralation between Amgen and SANOK RUBBER

Assuming the 90 days trading horizon Amgen Inc is expected to under-perform the SANOK RUBBER. In addition to that, Amgen is 1.26 times more volatile than SANOK RUBBER ZY. It trades about -0.08 of its total potential returns per unit of risk. SANOK RUBBER ZY is currently generating about 0.14 per unit of volatility. If you would invest  446.00  in SANOK RUBBER ZY on October 25, 2024 and sell it today you would earn a total of  56.00  from holding SANOK RUBBER ZY or generate 12.56% return on investment over 90 days.

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

Amgen Inc  vs.  SANOK RUBBER ZY

Amgen Inc

Risk-Adjusted Performance

0 of 100

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 latest uncertain performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

SANOK RUBBER ZY

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in SANOK RUBBER ZY are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, SANOK RUBBER reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Amgen and SANOK RUBBER

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

The idea behind Amgen Inc and SANOK RUBBER ZY 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..