Correlation Between Amgen and Victory Integrity

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

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

Diversification Opportunities for Amgen and Victory Integrity

0.03

Correlation Coefficient

Amgen  Victory Integrity

Significant diversification

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

Pair Corralation between Amgen and Victory Integrity

Given the investment horizon of 90 days Amgen Inc is expected to generate 0.99 times more return on investment than Victory Integrity. However, Amgen Inc is 1.01 times less risky than Victory Integrity. It trades about 0.13 of its potential returns per unit of risk. Victory Integrity Smallmid Cap is currently generating about -0.19 per unit of risk. If you would invest  27,587  in Amgen Inc on December 2, 2024 and sell it today you would earn a total of  3,219  from holding Amgen Inc or generate 11.67% return on investment over 90 days.

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

Amgen Inc  vs.  Victory Integrity Smallmid Cap

Amgen Inc

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Amgen Inc are ranked lower than 10 (%) 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 April 2025.

Victory Integrity

Risk-Adjusted Performance

Very Weak

Over the last 90 days Victory Integrity Smallmid Cap has generated negative risk-adjusted returns adding no value to fund investors. In spite of weak performance in the last few months, the Fund's basic indicators remain fairly strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the fund investors.

Pair Trading with Amgen and Victory Integrity

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

The idea behind Amgen Inc and Victory Integrity Smallmid Cap 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.