Correlation Between AMGEN and Awilco Drilling

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

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

Diversification Opportunities for AMGEN and Awilco Drilling

0.46

Correlation Coefficient

AMGEN  Awilco Drilling

Very weak diversification

The 3 months correlation between AMGEN and Awilco is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding AMGEN INC and Awilco Drilling PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Awilco Drilling PLC 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 are associated (or correlated) with Awilco Drilling. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Awilco Drilling PLC has no effect on the direction of AMGEN i.e., AMGEN and Awilco Drilling go up and down completely randomly.

Pair Corralation between AMGEN and Awilco Drilling

Assuming the 90 days trading horizon AMGEN INC is expected to under-perform the Awilco Drilling. In addition to that, AMGEN is 2.17 times more volatile than Awilco Drilling PLC. It trades about -0.15 of its total potential returns per unit of risk. Awilco Drilling PLC is currently generating about -0.13 per unit of volatility. If you would invest  197.00  in Awilco Drilling PLC on September 13, 2024 and sell it today you would lose (5.00) from holding Awilco Drilling PLC or give up 2.54% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	93.75%
Values	Daily Returns

AMGEN INC  vs.  Awilco Drilling PLC

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 latest conflicting 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 investors.

Awilco Drilling PLC

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Awilco Drilling PLC has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable fundamental indicators, Awilco Drilling is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with AMGEN and Awilco Drilling

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

The idea behind AMGEN INC and Awilco Drilling PLC 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.