Correlation Between BigBearai Holdings and AMGEN

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

By analyzing existing cross correlation between BigBearai Holdings and AMGEN INC 4663, you can compare the effects of market volatilities on BigBearai Holdings 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 BigBearai Holdings with a short position of AMGEN. Check out your portfolio center. Please also check ongoing floating volatility patterns of BigBearai Holdings and AMGEN.

Diversification Opportunities for BigBearai Holdings and AMGEN

-0.42

Correlation Coefficient

BigBearai Holdings  AMGEN

Very good diversification

The 3 months correlation between BigBearai and AMGEN is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding BigBearai Holdings and AMGEN INC 4663 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AMGEN INC 4663 and BigBearai Holdings 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 BigBearai Holdings 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 4663 has no effect on the direction of BigBearai Holdings i.e., BigBearai Holdings and AMGEN go up and down completely randomly.

Pair Corralation between BigBearai Holdings and AMGEN

Given the investment horizon of 90 days BigBearai Holdings is expected to generate 3.35 times more return on investment than AMGEN. However, BigBearai Holdings is 3.35 times more volatile than AMGEN INC 4663. It trades about 0.17 of its potential returns per unit of risk. AMGEN INC 4663 is currently generating about 0.01 per unit of risk. If you would invest  155.00  in BigBearai Holdings on September 12, 2024 and sell it today you would earn a total of  143.00  from holding BigBearai Holdings or generate 92.26% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	95.31%
Values	Daily Returns

BigBearai Holdings  vs.  AMGEN INC 4663

BigBearai Holdings

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in BigBearai Holdings are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite fairly unsteady basic indicators, BigBearai Holdings demonstrated solid returns over the last few months and may actually be approaching a breakup point.

AMGEN INC 4663

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days AMGEN INC 4663 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, AMGEN is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with BigBearai Holdings and AMGEN

The main advantage of trading using opposite BigBearai Holdings and AMGEN positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BigBearai Holdings 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.

The idea behind BigBearai Holdings and AMGEN INC 4663 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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.