Correlation Between Amgen and Neo Concept

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

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

Diversification Opportunities for Amgen and Neo Concept

0.2

Correlation Coefficient

Amgen  Neo Concept

Modest diversification

The 3 months correlation between Amgen and Neo is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Amgen Inc and Neo Concept International Grou in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Neo Concept Internat 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 Neo Concept. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Neo Concept Internat has no effect on the direction of Amgen i.e., Amgen and Neo Concept go up and down completely randomly.

Pair Corralation between Amgen and Neo Concept

Given the investment horizon of 90 days Amgen Inc is expected to generate 0.12 times more return on investment than Neo Concept. However, Amgen Inc is 8.02 times less risky than Neo Concept. It trades about 0.01 of its potential returns per unit of risk. Neo Concept International Group is currently generating about -0.06 per unit of risk. If you would invest  26,740  in Amgen Inc on September 13, 2024 and sell it today you would earn a total of  601.00  from holding Amgen Inc or generate 2.25% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	65.32%
Values	Daily Returns

Amgen Inc  vs.  Neo Concept International Grou

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 inconsistent 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.

Neo Concept Internat

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Neo Concept International Group are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite fairly unfluctuating fundamental indicators, Neo Concept demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Amgen and Neo Concept

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

The idea behind Amgen Inc and Neo Concept International 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.