Correlation Between Cleanaway Waste and Amgen

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

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

Diversification Opportunities for Cleanaway Waste and Amgen

-0.6

Correlation Coefficient

Cleanaway Waste  Amgen

Excellent diversification

The 3 months correlation between Cleanaway and Amgen is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Cleanaway Waste Management and Amgen Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amgen Inc and Cleanaway Waste 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 Cleanaway Waste Management 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 Cleanaway Waste i.e., Cleanaway Waste and Amgen go up and down completely randomly.

Pair Corralation between Cleanaway Waste and Amgen

Assuming the 90 days trading horizon Cleanaway Waste is expected to generate 36.68 times less return on investment than Amgen. In addition to that, Cleanaway Waste is 1.76 times more volatile than Amgen Inc. It trades about 0.0 of its total potential returns per unit of risk. Amgen Inc is currently generating about 0.19 per unit of volatility. If you would invest  25,033  in Amgen Inc on December 25, 2024 and sell it today you would earn a total of  4,202  from holding Amgen Inc or generate 16.79% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	98.36%
Values	Daily Returns

Cleanaway Waste Management  vs.  Amgen Inc

Cleanaway Waste Mana

Risk-Adjusted Performance

Very Weak

Over the last 90 days Cleanaway Waste Management has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Cleanaway Waste is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private 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 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 Cleanaway Waste and Amgen

The main advantage of trading using opposite Cleanaway Waste and Amgen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cleanaway Waste 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 Cleanaway Waste Management 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.