Correlation Between Ambea AB and BioInvent International

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

Diversification Opportunities for Ambea AB and BioInvent International

0.1
  Correlation Coefficient

Average diversification

The 3 months correlation between Ambea and BioInvent is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Ambea AB and BioInvent International AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BioInvent International and Ambea AB 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 Ambea AB are associated (or correlated) with BioInvent International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BioInvent International has no effect on the direction of Ambea AB i.e., Ambea AB and BioInvent International go up and down completely randomly.

Pair Corralation between Ambea AB and BioInvent International

Assuming the 90 days trading horizon Ambea AB is expected to generate 0.52 times more return on investment than BioInvent International. However, Ambea AB is 1.94 times less risky than BioInvent International. It trades about 0.13 of its potential returns per unit of risk. BioInvent International AB is currently generating about -0.29 per unit of risk. If you would invest  9,555  in Ambea AB on September 13, 2024 and sell it today you would earn a total of  310.00  from holding Ambea AB or generate 3.24% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Ambea AB  vs.  BioInvent International AB

 Performance 
       Timeline  
Ambea AB 

Risk-Adjusted Performance

8 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Ambea AB are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Ambea AB may actually be approaching a critical reversion point that can send shares even higher in January 2025.
BioInvent International 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days BioInvent International AB has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, BioInvent International is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Ambea AB and BioInvent International Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Ambea AB and BioInvent International

The main advantage of trading using opposite Ambea AB and BioInvent International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ambea AB position performs unexpectedly, BioInvent International 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 BioInvent International will offset losses from the drop in BioInvent International's long position.
The idea behind Ambea AB and BioInvent International AB 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.

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