Correlation Between Amgen and Xylo Technologies

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

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

Diversification Opportunities for Amgen and Xylo Technologies

0.13

Correlation Coefficient

Amgen  Xylo Technologies

Average diversification

The 3 months correlation between Amgen and Xylo is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Amgen Inc and Xylo Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xylo Technologies 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 Xylo Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xylo Technologies has no effect on the direction of Amgen i.e., Amgen and Xylo Technologies go up and down completely randomly.

Pair Corralation between Amgen and Xylo Technologies

Given the investment horizon of 90 days Amgen Inc is expected to under-perform the Xylo Technologies. But the stock apears to be less risky and, when comparing its historical volatility, Amgen Inc is 3.16 times less risky than Xylo Technologies. The stock trades about -0.16 of its potential returns per unit of risk. The Xylo Technologies is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  379.00  in Xylo Technologies on September 13, 2024 and sell it today you would earn a total of  1.00  from holding Xylo Technologies or generate 0.26% return on investment over 90 days.

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

Amgen Inc  vs.  Xylo Technologies

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.

Xylo Technologies

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Xylo Technologies are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating essential indicators, Xylo Technologies may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Amgen and Xylo Technologies

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

The idea behind Amgen Inc and Xylo Technologies 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.