Correlation Between Amicus Therapeutics and Amgen
Can any of the company-specific risk be diversified away by investing in both Amicus Therapeutics 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 Amicus Therapeutics and Amgen into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Amicus Therapeutics and Amgen Inc, you can compare the effects of market volatilities on Amicus Therapeutics 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 Amicus Therapeutics with a short position of Amgen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amicus Therapeutics and Amgen.
Diversification Opportunities for Amicus Therapeutics and Amgen
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Amicus and Amgen is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Amicus Therapeutics and Amgen Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amgen Inc and Amicus Therapeutics 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 Amicus Therapeutics 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 Amicus Therapeutics i.e., Amicus Therapeutics and Amgen go up and down completely randomly.
Pair Corralation between Amicus Therapeutics and Amgen
Given the investment horizon of 90 days Amicus Therapeutics is expected to under-perform the Amgen. In addition to that, Amicus Therapeutics is 1.27 times more volatile than Amgen Inc. It trades about -0.17 of its total potential returns per unit of risk. Amgen Inc is currently generating about -0.14 per unit of volatility. If you would invest 31,319 in Amgen Inc on October 24, 2024 and sell it today you would lose (4,108) from holding Amgen Inc or give up 13.12% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Amicus Therapeutics vs. Amgen Inc
Performance |
Timeline |
Amicus Therapeutics |
Amgen Inc |
Amicus Therapeutics and Amgen Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Amicus Therapeutics and Amgen
The main advantage of trading using opposite Amicus Therapeutics and Amgen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amicus Therapeutics 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.Amicus Therapeutics vs. Incyte | Amicus Therapeutics vs. Denali Therapeutics | Amicus Therapeutics vs. argenx NV ADR | Amicus Therapeutics vs. Harmony Biosciences Holdings |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
Money Managers Screen money managers from public funds and ETFs managed around the world | |
Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
Bonds Directory Find actively traded corporate debentures issued by US companies |