Correlation Between Amgen and Cowen

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

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

Diversification Opportunities for Amgen and Cowen

-0.84

Correlation Coefficient

Amgen  Cowen

Pay attention - limited upside

The 3 months correlation between Amgen and Cowen is -0.84. Overlapping area represents the amount of risk that can be diversified away by holding Amgen Inc and Cowen Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cowen Group and Amgen 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 Amgen Inc are associated (or correlated) with Cowen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cowen Group has no effect on the direction of Amgen i.e., Amgen and Cowen go up and down completely randomly.

Pair Corralation between Amgen and Cowen

If you would invest  3,899  in Cowen Group on September 29, 2024 and sell it today you would earn a total of  0.00  from holding Cowen Group or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	5.0%
Values	Daily Returns

Amgen Inc  vs.  Cowen Group

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

Cowen Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Cowen Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Cowen is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Amgen and Cowen

The main advantage of trading using opposite Amgen and Cowen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amgen position performs unexpectedly, Cowen 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 Cowen will offset losses from the drop in Cowen's long position.

The idea behind Amgen Inc and Cowen Group 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.