Correlation Between Victory Integrity and Amgen

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

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

Diversification Opportunities for Victory Integrity and Amgen

-0.57

Correlation Coefficient

Victory Integrity  Amgen

Excellent diversification

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

Pair Corralation between Victory Integrity and Amgen

Assuming the 90 days horizon Victory Integrity Smallmid Cap is expected to under-perform the Amgen. But the mutual fund apears to be less risky and, when comparing its historical volatility, Victory Integrity Smallmid Cap is 1.38 times less risky than Amgen. The mutual fund trades about -0.07 of its potential returns per unit of risk. The Amgen Inc is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest  25,722  in Amgen Inc on December 28, 2024 and sell it today you would earn a total of  4,973  from holding Amgen Inc or generate 19.33% return on investment over 90 days.

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

Victory Integrity Smallmid Cap  vs.  Amgen Inc

Victory Integrity

Risk-Adjusted Performance

Very Weak

Over the last 90 days Victory Integrity Smallmid Cap has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Victory Integrity is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Amgen Inc

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Amgen Inc are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of very conflicting technical and fundamental indicators, Amgen displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Victory Integrity and Amgen

The main advantage of trading using opposite Victory Integrity and Amgen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Victory Integrity 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 Victory Integrity Smallmid Cap 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.