Correlation Between Livetech and Amgen

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

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

Diversification Opportunities for Livetech and Amgen

0.68

Correlation Coefficient

Livetech  Amgen

Poor diversification

The 3 months correlation between Livetech and Amgen is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Livetech da Bahia and Amgen Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amgen Inc and Livetech 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 Livetech da Bahia 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 Livetech i.e., Livetech and Amgen go up and down completely randomly.

Pair Corralation between Livetech and Amgen

Assuming the 90 days trading horizon Livetech da Bahia is expected to under-perform the Amgen. In addition to that, Livetech is 1.1 times more volatile than Amgen Inc. It trades about -0.31 of its total potential returns per unit of risk. Amgen Inc is currently generating about -0.08 per unit of volatility. If you would invest  6,574  in Amgen Inc on September 13, 2024 and sell it today you would lose (718.00) from holding Amgen Inc or give up 10.92% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.39%
Values	Daily Returns

Livetech da Bahia  vs.  Amgen Inc

Livetech da Bahia

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Livetech da Bahia has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

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 latest weak performance, the Stock's technical and fundamental indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Livetech and Amgen

The main advantage of trading using opposite Livetech and Amgen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Livetech 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 Livetech da Bahia 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 Transaction History module to view history of all your transactions and understand their impact on performance.