Correlation Between Teleflex Incorporated and AMGEN

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

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

Diversification Opportunities for Teleflex Incorporated and AMGEN

0.85

Correlation Coefficient

Teleflex Incorporated  AMGEN

Very poor diversification

The 3 months correlation between Teleflex and AMGEN is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Teleflex Incorporated and AMGEN INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AMGEN INC and Teleflex Incorporated 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 Teleflex Incorporated 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 has no effect on the direction of Teleflex Incorporated i.e., Teleflex Incorporated and AMGEN go up and down completely randomly.

Pair Corralation between Teleflex Incorporated and AMGEN

Considering the 90-day investment horizon Teleflex Incorporated is expected to under-perform the AMGEN. In addition to that, Teleflex Incorporated is 2.82 times more volatile than AMGEN INC. It trades about -0.2 of its total potential returns per unit of risk. AMGEN INC is currently generating about -0.27 per unit of volatility. If you would invest  7,221  in AMGEN INC on September 15, 2024 and sell it today you would lose (685.00) from holding AMGEN INC or give up 9.49% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	71.88%
Values	Daily Returns

Teleflex Incorporated  vs.  AMGEN INC

Teleflex Incorporated

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Teleflex Incorporated has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of conflicting performance in the last few months, the Stock's technical and fundamental indicators remain fairly strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

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. Despite unfluctuating performance in the last few months, the Bond's basic indicators remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for AMGEN INC investors.

Pair Trading with Teleflex Incorporated and AMGEN

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