Correlation Between Amgen and BRADESCO

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Can any of the company-specific risk be diversified away by investing in both Amgen and BRADESCO 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 BRADESCO into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Amgen Inc and BRADESCO PN EJ, you can compare the effects of market volatilities on Amgen and BRADESCO 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 BRADESCO. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amgen and BRADESCO.

Diversification Opportunities for Amgen and BRADESCO

-0.5
  Correlation Coefficient

Very good diversification

The 3 months correlation between Amgen and BRADESCO is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Amgen Inc and BRADESCO PN EJ N1 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BRADESCO PN EJ 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 BRADESCO. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BRADESCO PN EJ has no effect on the direction of Amgen i.e., Amgen and BRADESCO go up and down completely randomly.

Pair Corralation between Amgen and BRADESCO

Given the investment horizon of 90 days Amgen is expected to generate 36.65 times less return on investment than BRADESCO. But when comparing it to its historical volatility, Amgen Inc is 1.56 times less risky than BRADESCO. It trades about 0.0 of its potential returns per unit of risk. BRADESCO PN EJ is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  1,607  in BRADESCO PN EJ on July 2, 2022 and sell it today you would earn a total of  371.00  from holding BRADESCO PN EJ or generate 23.09% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthVery Weak
Accuracy98.39%
ValuesDaily Returns

Amgen Inc  vs.  BRADESCO PN EJ N1

 Performance (%) 
       Timeline  
Amgen Inc 
Amgen Performance
0 of 100
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 Stock's technical and fundamental indicators remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

Amgen Price Channel

BRADESCO PN EJ 
BRADESCO Performance
13 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in BRADESCO PN EJ are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, BRADESCO reported solid returns over the last few months and may actually be approaching a breakup point.

BRADESCO Price Channel

Amgen and BRADESCO Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Amgen and BRADESCO

The main advantage of trading using opposite Amgen and BRADESCO positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amgen position performs unexpectedly, BRADESCO 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 BRADESCO will offset losses from the drop in BRADESCO's long position.
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The idea behind Amgen Inc and BRADESCO PN EJ 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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Check out your portfolio center. 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.

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