Correlation Between Marine Products and AMGEN

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

By analyzing existing cross correlation between Marine Products and AMGEN INC 44, you can compare the effects of market volatilities on Marine Products 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 Marine Products with a short position of AMGEN. Check out your portfolio center. Please also check ongoing floating volatility patterns of Marine Products and AMGEN.

Diversification Opportunities for Marine Products and AMGEN

0.01

Correlation Coefficient

Marine Products  AMGEN

Significant diversification

The 3 months correlation between Marine and AMGEN is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Marine Products and AMGEN INC 44 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AMGEN INC 44 and Marine Products 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 Marine Products 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 44 has no effect on the direction of Marine Products i.e., Marine Products and AMGEN go up and down completely randomly.

Pair Corralation between Marine Products and AMGEN

Considering the 90-day investment horizon Marine Products is expected to generate 2.16 times more return on investment than AMGEN. However, Marine Products is 2.16 times more volatile than AMGEN INC 44. It trades about 0.04 of its potential returns per unit of risk. AMGEN INC 44 is currently generating about -0.15 per unit of risk. If you would invest  934.00  in Marine Products on September 16, 2024 and sell it today you would earn a total of  31.00  from holding Marine Products or generate 3.32% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	96.92%
Values	Daily Returns

Marine Products  vs.  AMGEN INC 44

Marine Products

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Marine Products are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong basic indicators, Marine Products is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

AMGEN INC 44

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days AMGEN INC 44 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Bond's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for AMGEN INC 44 investors.

Pair Trading with Marine Products and AMGEN

The main advantage of trading using opposite Marine Products and AMGEN positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Marine Products 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 Marine Products and AMGEN INC 44 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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.