Correlation Between Swedish Orphan and Amgen
Can any of the company-specific risk be diversified away by investing in both Swedish Orphan 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 Swedish Orphan and Amgen into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Swedish Orphan Biovitrum and Amgen Inc, you can compare the effects of market volatilities on Swedish Orphan 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 Swedish Orphan with a short position of Amgen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Swedish Orphan and Amgen.
Diversification Opportunities for Swedish Orphan and Amgen
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Swedish and Amgen is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Swedish Orphan Biovitrum and Amgen Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amgen Inc and Swedish Orphan 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 Swedish Orphan Biovitrum 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 Swedish Orphan i.e., Swedish Orphan and Amgen go up and down completely randomly.
Pair Corralation between Swedish Orphan and Amgen
Assuming the 90 days horizon Swedish Orphan Biovitrum is expected to under-perform the Amgen. In addition to that, Swedish Orphan is 2.0 times more volatile than Amgen Inc. It trades about -0.32 of its total potential returns per unit of risk. Amgen Inc is currently generating about -0.12 per unit of volatility. If you would invest 28,177 in Amgen Inc on January 26, 2024 and sell it today you would lose (876.00) from holding Amgen Inc or give up 3.11% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Swedish Orphan Biovitrum vs. Amgen Inc
Performance |
| Timeline |
| Swedish Orphan Biovitrum |
| Amgen Inc |
Swedish Orphan and Amgen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Swedish Orphan and Amgen
The main advantage of trading using opposite Swedish Orphan and Amgen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Swedish Orphan 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.| Swedish Orphan vs. Collegium Pharmaceutical | Swedish Orphan vs. Amphastar P | Swedish Orphan vs. Eagle Pharmaceuticals | Swedish Orphan vs. Alkermes Plc |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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