Correlation Between GOLD ROAD and Amgen

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

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

Diversification Opportunities for GOLD ROAD and Amgen

-0.63

Correlation Coefficient

GOLD ROAD  Amgen

Excellent diversification

The 3 months correlation between GOLD and Amgen is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding GOLD ROAD RES and Amgen Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amgen Inc and GOLD ROAD 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 GOLD ROAD RES are associated (or correlated) with Amgen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amgen Inc has no effect on the direction of GOLD ROAD i.e., GOLD ROAD and Amgen go up and down completely randomly.

Pair Corralation between GOLD ROAD and Amgen

Assuming the 90 days trading horizon GOLD ROAD RES is expected to generate 1.51 times more return on investment than Amgen. However, GOLD ROAD is 1.51 times more volatile than Amgen Inc. It trades about 0.03 of its potential returns per unit of risk. Amgen Inc is currently generating about -0.14 per unit of risk. If you would invest  124.00  in GOLD ROAD RES on October 9, 2024 and sell it today you would earn a total of  1.00  from holding GOLD ROAD RES or generate 0.81% return on investment over 90 days.

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

GOLD ROAD RES  vs.  Amgen Inc

GOLD ROAD RES

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in GOLD ROAD RES are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain basic indicators, GOLD ROAD exhibited solid returns over the last few months and may actually be approaching a breakup point.

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. Despite fragile performance in the last few months, the Stock's technical and fundamental indicators remain somewhat strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with GOLD ROAD and Amgen

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

The idea behind GOLD ROAD RES and Amgen 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.