Correlation Between Amgen and Gamehost

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

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

Diversification Opportunities for Amgen and Gamehost

-0.03

Correlation Coefficient

Amgen  Gamehost

Good diversification

The 3 months correlation between Amgen and Gamehost is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Amgen Inc and Gamehost in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gamehost 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 Gamehost. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gamehost has no effect on the direction of Amgen i.e., Amgen and Gamehost go up and down completely randomly.

Pair Corralation between Amgen and Gamehost

Given the investment horizon of 90 days Amgen Inc is expected to generate 1.23 times more return on investment than Gamehost. However, Amgen is 1.23 times more volatile than Gamehost. It trades about 0.22 of its potential returns per unit of risk. Gamehost is currently generating about 0.17 per unit of risk. If you would invest  26,127  in Amgen Inc on December 20, 2024 and sell it today you would earn a total of  5,448  from holding Amgen Inc or generate 20.85% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	93.22%
Values	Daily Returns

Amgen Inc  vs.  Gamehost

Amgen Inc

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Amgen Inc are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of very conflicting technical and fundamental indicators, Amgen displayed solid returns over the last few months and may actually be approaching a breakup point.

Gamehost

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Gamehost are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak technical and fundamental indicators, Gamehost reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Amgen and Gamehost

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

The idea behind Amgen Inc and Gamehost 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.