Correlation Between Amgen and Nano Mobile

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

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

Diversification Opportunities for Amgen and Nano Mobile

0.4

Correlation Coefficient

Amgen  Nano Mobile

Very weak diversification

The 3 months correlation between Amgen and Nano is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Amgen Inc and Nano Mobile Healthcare in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nano Mobile Healthcare 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 Nano Mobile. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nano Mobile Healthcare has no effect on the direction of Amgen i.e., Amgen and Nano Mobile go up and down completely randomly.

Pair Corralation between Amgen and Nano Mobile

Given the investment horizon of 90 days Amgen Inc is expected to under-perform the Nano Mobile. But the stock apears to be less risky and, when comparing its historical volatility, Amgen Inc is 16.35 times less risky than Nano Mobile. The stock trades about -0.21 of its potential returns per unit of risk. The Nano Mobile Healthcare is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  0.03  in Nano Mobile Healthcare on September 13, 2024 and sell it today you would lose (0.01) from holding Nano Mobile Healthcare or give up 33.33% 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.  Nano Mobile Healthcare

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.

Nano Mobile Healthcare

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Nano Mobile Healthcare are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite fairly unsteady basic indicators, Nano Mobile demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Amgen and Nano Mobile

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

The idea behind Amgen Inc and Nano Mobile Healthcare 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.