Correlation Between Exagen and Amgen

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

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

Diversification Opportunities for Exagen and Amgen

-0.84

Correlation Coefficient

Exagen  Amgen

Pay attention - limited upside

The 3 months correlation between Exagen and Amgen is -0.84. Overlapping area represents the amount of risk that can be diversified away by holding Exagen Inc and Amgen Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amgen Inc and Exagen 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 Exagen Inc 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 Exagen i.e., Exagen and Amgen go up and down completely randomly.

Pair Corralation between Exagen and Amgen

Considering the 90-day investment horizon Exagen Inc is expected to under-perform the Amgen. In addition to that, Exagen is 10.01 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 -0.23 per unit of volatility. If you would invest  27,433  in Amgen Inc on October 6, 2024 and sell it today you would lose (1,311) from holding Amgen Inc or give up 4.78% of portfolio value over 90 days.

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

Exagen Inc  vs.  Amgen Inc

Exagen Inc

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Exagen Inc are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of very weak technical and fundamental indicators, Exagen displayed solid returns over the last few months and may actually be approaching a breakup point.

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. In spite of conflicting performance in the last few months, the Stock's technical and fundamental indicators remain very healthy which may send shares a bit higher in February 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Exagen and Amgen

The main advantage of trading using opposite Exagen and Amgen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Exagen 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 Exagen Inc 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.