Correlation Between Amgen and Immunome

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

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

Diversification Opportunities for Amgen and Immunome

0.78

Correlation Coefficient

Amgen  Immunome

Poor diversification

The 3 months correlation between Amgen and Immunome is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Amgen Inc and Immunome in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Immunome 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 Immunome. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Immunome has no effect on the direction of Amgen i.e., Amgen and Immunome go up and down completely randomly.

Pair Corralation between Amgen and Immunome

Given the investment horizon of 90 days Amgen Inc is expected to under-perform the Immunome. But the stock apears to be less risky and, when comparing its historical volatility, Amgen Inc is 2.92 times less risky than Immunome. The stock trades about -0.21 of its potential returns per unit of risk. The Immunome is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  1,220  in Immunome on August 31, 2024 and sell it today you would earn a total of  127.00  from holding Immunome or generate 10.41% return on investment over 90 days.

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

Amgen Inc  vs.  Immunome

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 unsteady performance in the last few months, the Stock's technical and fundamental indicators remain very healthy which may send shares a bit higher in December 2024. The recent disarray may also be a sign of long period up-swing for the firm investors.

Immunome

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Immunome has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Immunome is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Amgen and Immunome

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

The idea behind Amgen Inc and Immunome 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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.