Correlation Between Amgen and GLOBUS MEDICAL-A

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

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

Diversification Opportunities for Amgen and GLOBUS MEDICAL-A

-0.72

Correlation Coefficient

Amgen  GLOBUS MEDICAL-A

Pay attention - limited upside

The 3 months correlation between Amgen and GLOBUS is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding Amgen Inc and GLOBUS MEDICAL A in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GLOBUS MEDICAL A 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 GLOBUS MEDICAL-A. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GLOBUS MEDICAL A has no effect on the direction of Amgen i.e., Amgen and GLOBUS MEDICAL-A go up and down completely randomly.

Pair Corralation between Amgen and GLOBUS MEDICAL-A

Assuming the 90 days trading horizon Amgen Inc is expected to under-perform the GLOBUS MEDICAL-A. But the stock apears to be less risky and, when comparing its historical volatility, Amgen Inc is 1.29 times less risky than GLOBUS MEDICAL-A. The stock trades about -0.2 of its potential returns per unit of risk. The GLOBUS MEDICAL A is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  7,850  in GLOBUS MEDICAL A on October 10, 2024 and sell it today you would earn a total of  150.00  from holding GLOBUS MEDICAL A or generate 1.91% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	94.44%
Values	Daily Returns

Amgen Inc  vs.  GLOBUS MEDICAL A

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 uncertain performance in the last few months, the Stock's technical and fundamental indicators remain comparatively stable which may send shares a bit higher in February 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

GLOBUS MEDICAL A

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in GLOBUS MEDICAL A are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain technical and fundamental indicators, GLOBUS MEDICAL-A exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Amgen and GLOBUS MEDICAL-A

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

The idea behind Amgen Inc and GLOBUS MEDICAL A 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.

Check out your portfolio center.

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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.