Correlation Between Amgen and 40434LAB1

Can any of the company-specific risk be diversified away by investing in both Amgen and 40434LAB1 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 40434LAB1 into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Amgen Inc and HP INC, you can compare the effects of market volatilities on Amgen and 40434LAB1 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 40434LAB1. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amgen and 40434LAB1.

Diversification Opportunities for Amgen and 40434LAB1

0.59

Correlation Coefficient

Amgen  40434LAB1

Very weak diversification

The 3 months correlation between Amgen and 40434LAB1 is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Amgen Inc and HP INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on 40434LAB1 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 40434LAB1. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of 40434LAB1 has no effect on the direction of Amgen i.e., Amgen and 40434LAB1 go up and down completely randomly.

Pair Corralation between Amgen and 40434LAB1

Given the investment horizon of 90 days Amgen Inc is expected to under-perform the 40434LAB1. In addition to that, Amgen is 2.25 times more volatile than HP INC. It trades about -0.18 of its total potential returns per unit of risk. HP INC is currently generating about -0.14 per unit of volatility. If you would invest  9,705  in HP INC on September 16, 2024 and sell it today you would lose (644.00) from holding HP INC or give up 6.64% of portfolio value over 90 days.

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

Amgen Inc  vs.  HP INC

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

40434LAB1

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days HP INC has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest uncertain performance, the Bond's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for HP INC investors.

Pair Trading with Amgen and 40434LAB1

The main advantage of trading using opposite Amgen and 40434LAB1 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amgen position performs unexpectedly, 40434LAB1 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 40434LAB1 will offset losses from the drop in 40434LAB1's long position.

The idea behind Amgen Inc and HP INC 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.