Correlation Between Amgen and Zane Interactive

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

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

Diversification Opportunities for Amgen and Zane Interactive

0.0

Correlation Coefficient

Amgen  Zane Interactive

Pay attention - limited upside

The 3 months correlation between Amgen and Zane is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Amgen Inc and Zane Interactive Publishing in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zane Interactive Pub 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 Zane Interactive. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zane Interactive Pub has no effect on the direction of Amgen i.e., Amgen and Zane Interactive go up and down completely randomly.

Pair Corralation between Amgen and Zane Interactive

Given the investment horizon of 90 days Amgen Inc is expected to generate 0.33 times more return on investment than Zane Interactive. However, Amgen Inc is 3.03 times less risky than Zane Interactive. It trades about 0.02 of its potential returns per unit of risk. Zane Interactive Publishing is currently generating about -0.04 per unit of risk. If you would invest  24,710  in Amgen Inc on September 15, 2024 and sell it today you would earn a total of  2,352  from holding Amgen Inc or generate 9.52% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	99.8%
Values	Daily Returns

Amgen Inc  vs.  Zane Interactive Publishing

Amgen Inc

Risk-Adjusted Performance

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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.

Zane Interactive Pub

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Zane Interactive Publishing has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, Zane Interactive is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Amgen and Zane Interactive

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

The idea behind Amgen Inc and Zane Interactive Publishing 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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.