Correlation Between Amgen and Sanofi ADR

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

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

Diversification Opportunities for Amgen and Sanofi ADR

-0.41

Correlation Coefficient

Amgen  Sanofi ADR

Very good diversification

The 3 months correlation between Amgen and Sanofi is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Amgen Inc and Sanofi ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sanofi ADR 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 Sanofi ADR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sanofi ADR has no effect on the direction of Amgen i.e., Amgen and Sanofi ADR go up and down completely randomly.

Pair Corralation between Amgen and Sanofi ADR

Given the investment horizon of 90 days Amgen Inc is expected to generate 0.96 times more return on investment than Sanofi ADR. However, Amgen Inc is 1.04 times less risky than Sanofi ADR. It trades about 0.1 of its potential returns per unit of risk. Sanofi ADR is currently generating about -0.03 per unit of risk. If you would invest  27,342  in Amgen Inc on May 7, 2025 and sell it today you would earn a total of  2,852  from holding Amgen Inc or generate 10.43% return on investment over 90 days.

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

Amgen Inc  vs.  Sanofi ADR

Amgen Inc

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Amgen Inc are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of very weak technical and fundamental indicators, Amgen may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Sanofi ADR

Risk-Adjusted Performance

Very Weak

Over the last 90 days Sanofi ADR has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, Sanofi ADR is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Amgen and Sanofi ADR

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

The idea behind Amgen Inc and Sanofi ADR 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.