Correlation Between T-MOBILE and Amgen

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

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

Diversification Opportunities for T-MOBILE and Amgen

0.87

Correlation Coefficient

T-MOBILE  Amgen

Very poor diversification

The 3 months correlation between T-MOBILE and Amgen is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding T MOBILE US and Amgen Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amgen Inc and T-MOBILE 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 T MOBILE US 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 T-MOBILE i.e., T-MOBILE and Amgen go up and down completely randomly.

Pair Corralation between T-MOBILE and Amgen

Assuming the 90 days trading horizon T-MOBILE is expected to generate 1.29 times less return on investment than Amgen. In addition to that, T-MOBILE is 1.18 times more volatile than Amgen Inc. It trades about 0.1 of its total potential returns per unit of risk. Amgen Inc is currently generating about 0.15 per unit of volatility. If you would invest  25,097  in Amgen Inc on December 23, 2024 and sell it today you would earn a total of  3,903  from holding Amgen Inc or generate 15.55% return on investment over 90 days.

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

T MOBILE US  vs.  Amgen Inc

T MOBILE US

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in T MOBILE US are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, T-MOBILE may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Amgen Inc

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Amgen Inc are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of rather fragile technical and fundamental indicators, Amgen exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with T-MOBILE and Amgen

The main advantage of trading using opposite T-MOBILE and Amgen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if T-MOBILE 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 T MOBILE US 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.