Correlation Between PT Bank and Amgen

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

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

Diversification Opportunities for PT Bank and Amgen

-0.85

Correlation Coefficient

PT Bank  Amgen

Pay attention - limited upside

The 3 months correlation between PQ9 and Amgen is -0.85. Overlapping area represents the amount of risk that can be diversified away by holding PT Bank Mandiri and Amgen Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amgen Inc and PT Bank 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 PT Bank Mandiri 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 PT Bank i.e., PT Bank and Amgen go up and down completely randomly.

Pair Corralation between PT Bank and Amgen

Assuming the 90 days horizon PT Bank Mandiri is expected to under-perform the Amgen. In addition to that, PT Bank is 3.53 times more volatile than Amgen Inc. It trades about -0.05 of its total potential returns per unit of risk. Amgen Inc is currently generating about 0.17 per unit of volatility. If you would invest  24,804  in Amgen Inc on December 19, 2024 and sell it today you would earn a total of  4,131  from holding Amgen Inc or generate 16.65% return on investment over 90 days.

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

PT Bank Mandiri  vs.  Amgen Inc

PT Bank Mandiri

Risk-Adjusted Performance

Very Weak

Over the last 90 days PT Bank Mandiri 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 13 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain technical and fundamental indicators, Amgen unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with PT Bank and Amgen

The main advantage of trading using opposite PT Bank and Amgen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PT Bank 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 PT Bank Mandiri 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.