Correlation Between Ikena Oncology and Amgen

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

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

Diversification Opportunities for Ikena Oncology and Amgen

-0.06

Correlation Coefficient

Ikena Oncology  Amgen

Good diversification

The 3 months correlation between Ikena and Amgen is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Ikena Oncology and Amgen Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amgen Inc and Ikena Oncology 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 Ikena Oncology 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 Ikena Oncology i.e., Ikena Oncology and Amgen go up and down completely randomly.

Pair Corralation between Ikena Oncology and Amgen

Given the investment horizon of 90 days Ikena Oncology is expected to generate 1.42 times less return on investment than Amgen. In addition to that, Ikena Oncology is 1.98 times more volatile than Amgen Inc. It trades about 0.02 of its total potential returns per unit of risk. Amgen Inc is currently generating about 0.07 per unit of volatility. If you would invest  28,714  in Amgen Inc on February 23, 2024 and sell it today you would earn a total of  2,227  from holding Amgen Inc or generate 7.76% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Ikena Oncology  vs.  Amgen Inc

Ikena Oncology

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Ikena Oncology are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Ikena Oncology is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Amgen Inc

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Amgen Inc are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of very fragile technical and fundamental indicators, Amgen may actually be approaching a critical reversion point that can send shares even higher in June 2024.

Pair Trading with Ikena Oncology and Amgen

The main advantage of trading using opposite Ikena Oncology and Amgen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ikena Oncology 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 Ikena Oncology 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.

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 the Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.