Correlation Between INTERSHOP Communications and Amgen

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

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

Diversification Opportunities for INTERSHOP Communications and Amgen

0.57

Correlation Coefficient

INTERSHOP Communications  Amgen

Very weak diversification

The 3 months correlation between INTERSHOP and Amgen is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding INTERSHOP Communications Aktie and Amgen Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amgen Inc and INTERSHOP Communications 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 INTERSHOP Communications Aktiengesellschaft 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 INTERSHOP Communications i.e., INTERSHOP Communications and Amgen go up and down completely randomly.

Pair Corralation between INTERSHOP Communications and Amgen

Assuming the 90 days trading horizon INTERSHOP Communications Aktiengesellschaft is expected to under-perform the Amgen. But the stock apears to be less risky and, when comparing its historical volatility, INTERSHOP Communications Aktiengesellschaft is 1.1 times less risky than Amgen. The stock trades about -0.07 of its potential returns per unit of risk. The Amgen Inc is currently generating about -0.06 of returns per unit of risk over similar time horizon. If you would invest  29,043  in Amgen Inc on October 26, 2024 and sell it today you would lose (2,613) from holding Amgen Inc or give up 9.0% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.33%
Values	Daily Returns

INTERSHOP Communications Aktie  vs.  Amgen Inc

INTERSHOP Communications

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days INTERSHOP Communications Aktiengesellschaft has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's basic indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

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 latest uncertain performance, the Stock's technical and fundamental indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Pair Trading with INTERSHOP Communications and Amgen

The main advantage of trading using opposite INTERSHOP Communications and Amgen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if INTERSHOP Communications 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 INTERSHOP Communications Aktiengesellschaft 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.

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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..