Correlation Between Intel and AMGEN

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

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

Diversification Opportunities for Intel and AMGEN

-0.38

Correlation Coefficient

Intel  AMGEN

Very good diversification

The 3 months correlation between Intel and AMGEN is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Intel 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 Intel 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 Intel 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 Intel i.e., Intel and AMGEN go up and down completely randomly.

Pair Corralation between Intel and AMGEN

Given the investment horizon of 90 days Intel is expected to generate 1.29 times more return on investment than AMGEN. However, Intel is 1.29 times more volatile than AMGEN INC 4663. It trades about 0.04 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  1,936  in Intel on September 12, 2024 and sell it today you would earn a total of  76.00  from holding Intel or generate 3.93% return on investment over 90 days.

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

Intel  vs.  AMGEN INC 4663

Intel

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Intel are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound basic indicators, Intel is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

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 Intel and AMGEN

The main advantage of trading using opposite Intel and AMGEN positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Intel 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 Intel 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.