Correlation Between Mead Johnson and Amgen
Can any of the company-specific risk be diversified away by investing in both Mead Johnson 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 Mead Johnson and Amgen into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mead Johnson Nutrition and Amgen Inc, you can compare the effects of market volatilities on Mead Johnson 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 Mead Johnson with a short position of Amgen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mead Johnson and Amgen.
Diversification Opportunities for Mead Johnson and Amgen
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Mead and Amgen is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Mead Johnson Nutrition and Amgen Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amgen Inc and Mead Johnson 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 Mead Johnson Nutrition 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 Mead Johnson i.e., Mead Johnson and Amgen go up and down completely randomly.
Pair Corralation between Mead Johnson and Amgen
If you would invest 23,084 in Amgen Inc on January 24, 2024 and sell it today you would earn a total of 4,270 from holding Amgen Inc or generate 18.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
Mead Johnson Nutrition vs. Amgen Inc
Performance |
| Timeline |
| Mead Johnson Nutrition |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Amgen Inc |
Mead Johnson and Amgen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mead Johnson and Amgen
The main advantage of trading using opposite Mead Johnson and Amgen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mead Johnson 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.| Mead Johnson vs. Arcimoto | Mead Johnson vs. Amgen Inc | Mead Johnson vs. Teleflex Incorporated | Mead Johnson vs. Universal Display |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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