Correlation Between AMGEN and ATRenew

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

By analyzing existing cross correlation between AMGEN INC 44 and ATRenew Inc DRC, you can compare the effects of market volatilities on AMGEN and ATRenew 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 ATRenew. Check out your portfolio center. Please also check ongoing floating volatility patterns of AMGEN and ATRenew.

Diversification Opportunities for AMGEN and ATRenew

-0.14

Correlation Coefficient

AMGEN  ATRenew

Good diversification

The 3 months correlation between AMGEN and ATRenew is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding AMGEN INC 44 and ATRenew Inc DRC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ATRenew Inc DRC 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 44 are associated (or correlated) with ATRenew. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ATRenew Inc DRC has no effect on the direction of AMGEN i.e., AMGEN and ATRenew go up and down completely randomly.

Pair Corralation between AMGEN and ATRenew

Assuming the 90 days trading horizon AMGEN INC 44 is expected to under-perform the ATRenew. But the bond apears to be less risky and, when comparing its historical volatility, AMGEN INC 44 is 6.4 times less risky than ATRenew. The bond trades about -0.15 of its potential returns per unit of risk. The ATRenew Inc DRC is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  234.00  in ATRenew Inc DRC on September 14, 2024 and sell it today you would earn a total of  63.00  from holding ATRenew Inc DRC or generate 26.92% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	95.24%
Values	Daily Returns

AMGEN INC 44  vs.  ATRenew Inc DRC

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 fragile 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.

ATRenew Inc DRC

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in ATRenew Inc DRC are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain basic indicators, ATRenew exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with AMGEN and ATRenew

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

The idea behind AMGEN INC 44 and ATRenew Inc DRC 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..