Correlation Between Amgen and Celularity

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

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

Diversification Opportunities for Amgen and Celularity

0.76

Correlation Coefficient

Amgen  Celularity

Poor diversification

The 3 months correlation between Amgen and Celularity is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Amgen Inc and Celularity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Celularity 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 Celularity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Celularity has no effect on the direction of Amgen i.e., Amgen and Celularity go up and down completely randomly.

Pair Corralation between Amgen and Celularity

Given the investment horizon of 90 days Amgen is expected to generate 20.51 times less return on investment than Celularity. But when comparing it to its historical volatility, Amgen Inc is 15.13 times less risky than Celularity. It trades about 0.1 of its potential returns per unit of risk. Celularity is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest  2.00  in Celularity on November 29, 2024 and sell it today you would earn a total of  2.50  from holding Celularity or generate 125.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	88.14%
Values	Daily Returns

Amgen Inc  vs.  Celularity

Amgen Inc

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Amgen Inc are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of very conflicting technical and fundamental indicators, Amgen may actually be approaching a critical reversion point that can send shares even higher in March 2025.

Celularity

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Celularity are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of fairly uncertain basic indicators, Celularity showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Amgen and Celularity

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

The idea behind Amgen Inc and Celularity 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.