Correlation Between Amgen and Artisan Partners

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

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

Diversification Opportunities for Amgen and Artisan Partners

-0.75

Correlation Coefficient

Amgen  Artisan Partners

Pay attention - limited upside

The 3 months correlation between Amgen and Artisan is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding Amgen Inc and Artisan Partners Asset in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Artisan Partners Asset 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 Artisan Partners. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Artisan Partners Asset has no effect on the direction of Amgen i.e., Amgen and Artisan Partners go up and down completely randomly.

Pair Corralation between Amgen and Artisan Partners

Given the investment horizon of 90 days Amgen Inc is expected to under-perform the Artisan Partners. But the stock apears to be less risky and, when comparing its historical volatility, Amgen Inc is 1.07 times less risky than Artisan Partners. The stock trades about -0.13 of its potential returns per unit of risk. The Artisan Partners Asset is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest  3,927  in Artisan Partners Asset on September 5, 2024 and sell it today you would earn a total of  962.00  from holding Artisan Partners Asset or generate 24.5% return on investment over 90 days.

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

Amgen Inc  vs.  Artisan Partners Asset

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 conflicting performance in the last few months, the Stock's technical and fundamental indicators remain very healthy which may send shares a bit higher in January 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Artisan Partners Asset

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Artisan Partners Asset are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of very abnormal basic indicators, Artisan Partners displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Amgen and Artisan Partners

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

The idea behind Amgen Inc and Artisan Partners Asset 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..