Correlation Between Adler Group and Ambase Corp
Can any of the company-specific risk be diversified away by investing in both Adler Group and Ambase Corp 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 Adler Group and Ambase Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Adler Group SA and Ambase Corp, you can compare the effects of market volatilities on Adler Group and Ambase Corp 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 Adler Group with a short position of Ambase Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Adler Group and Ambase Corp.
Diversification Opportunities for Adler Group and Ambase Corp
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Adler and Ambase is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Adler Group SA and Ambase Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ambase Corp and Adler Group 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 Adler Group SA are associated (or correlated) with Ambase Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ambase Corp has no effect on the direction of Adler Group i.e., Adler Group and Ambase Corp go up and down completely randomly.
Pair Corralation between Adler Group and Ambase Corp
Assuming the 90 days horizon Adler Group SA is expected to generate 0.82 times more return on investment than Ambase Corp. However, Adler Group SA is 1.22 times less risky than Ambase Corp. It trades about 0.1 of its potential returns per unit of risk. Ambase Corp is currently generating about -0.03 per unit of risk. If you would invest 27.00 in Adler Group SA on November 2, 2024 and sell it today you would earn a total of 8.00 from holding Adler Group SA or generate 29.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.04% |
| Values | Daily Returns |
Adler Group SA vs. Ambase Corp
Performance |
| Timeline |
| Adler Group SA |
| Ambase Corp |
Adler Group and Ambase Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Adler Group and Ambase Corp
The main advantage of trading using opposite Adler Group and Ambase Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Adler Group position performs unexpectedly, Ambase Corp 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 Ambase Corp will offset losses from the drop in Ambase Corp's long position.| Adler Group vs. Aztec Land Comb | Adler Group vs. Bridgemarq Real Estate | Adler Group vs. Ambase Corp | Adler Group vs. Agritek Holdings |
| Ambase Corp vs. Adler Group SA | Ambase Corp vs. Aztec Land Comb | Ambase Corp vs. Bridgemarq Real Estate | Ambase Corp vs. Agritek Holdings |
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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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