Correlation Between GEAR4MUSIC and Amgen

Can any of the company-specific risk be diversified away by investing in both GEAR4MUSIC 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 GEAR4MUSIC and Amgen into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between GEAR4MUSIC LS 10 and Amgen Inc, you can compare the effects of market volatilities on GEAR4MUSIC 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 GEAR4MUSIC with a short position of Amgen. Check out your portfolio center. Please also check ongoing floating volatility patterns of GEAR4MUSIC and Amgen.

Diversification Opportunities for GEAR4MUSIC and Amgen

-0.73

Correlation Coefficient

GEAR4MUSIC  Amgen

Pay attention - limited upside

The 3 months correlation between GEAR4MUSIC and Amgen is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding GEAR4MUSIC LS 10 and Amgen Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amgen Inc and GEAR4MUSIC 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 GEAR4MUSIC LS 10 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 GEAR4MUSIC i.e., GEAR4MUSIC and Amgen go up and down completely randomly.

Pair Corralation between GEAR4MUSIC and Amgen

Assuming the 90 days horizon GEAR4MUSIC LS 10 is expected to under-perform the Amgen. In addition to that, GEAR4MUSIC is 1.58 times more volatile than Amgen Inc. It trades about -0.13 of its total potential returns per unit of risk. Amgen Inc is currently generating about 0.15 per unit of volatility. If you would invest  25,097  in Amgen Inc on December 23, 2024 and sell it today you would earn a total of  3,903  from holding Amgen Inc or generate 15.55% return on investment over 90 days.

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

GEAR4MUSIC LS 10  vs.  Amgen Inc

GEAR4MUSIC LS 10

Risk-Adjusted Performance

Very Weak

Over the last 90 days GEAR4MUSIC LS 10 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 basic indicators remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Amgen Inc

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Amgen Inc are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of rather fragile technical and fundamental indicators, Amgen exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with GEAR4MUSIC and Amgen

The main advantage of trading using opposite GEAR4MUSIC and Amgen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GEAR4MUSIC 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 GEAR4MUSIC LS 10 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.