Correlation Between Amgen and Jutal Offshore

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

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

Diversification Opportunities for Amgen and Jutal Offshore

-0.64

Correlation Coefficient

Amgen  Jutal Offshore

Excellent diversification

The 3 months correlation between Amgen and Jutal is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Amgen Inc and Jutal Offshore Oil in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jutal Offshore Oil 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 Jutal Offshore. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jutal Offshore Oil has no effect on the direction of Amgen i.e., Amgen and Jutal Offshore go up and down completely randomly.

Pair Corralation between Amgen and Jutal Offshore

Given the investment horizon of 90 days Amgen is expected to generate 1.38 times less return on investment than Jutal Offshore. But when comparing it to its historical volatility, Amgen Inc is 2.09 times less risky than Jutal Offshore. It trades about 0.21 of its potential returns per unit of risk. Jutal Offshore Oil is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest  1,905  in Jutal Offshore Oil on October 20, 2024 and sell it today you would earn a total of  116.00  from holding Jutal Offshore Oil or generate 6.09% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	90.91%
Values	Daily Returns

Amgen Inc  vs.  Jutal Offshore Oil

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

Jutal Offshore Oil

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Jutal Offshore Oil are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong basic indicators, Jutal Offshore is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Amgen and Jutal Offshore

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

The idea behind Amgen Inc and Jutal Offshore Oil 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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.