Correlation Between Ambu AS and Novocure
Can any of the company-specific risk be diversified away by investing in both Ambu AS and Novocure 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 Ambu AS and Novocure into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ambu AS and Novocure, you can compare the effects of market volatilities on Ambu AS and Novocure 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 Ambu AS with a short position of Novocure. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ambu AS and Novocure.
Diversification Opportunities for Ambu AS and Novocure
Very good diversification
The 3 months correlation between Ambu and Novocure is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Ambu AS and Novocure in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Novocure and Ambu AS 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 Ambu AS are associated (or correlated) with Novocure. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Novocure has no effect on the direction of Ambu AS i.e., Ambu AS and Novocure go up and down completely randomly.
Pair Corralation between Ambu AS and Novocure
If you would invest 1,518 in Novocure on September 1, 2024 and sell it today you would earn a total of 486.00 from holding Novocure or generate 32.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 91.3% |
| Values | Daily Returns |
Ambu AS vs. Novocure
Performance |
| Timeline |
| Ambu AS |
| Novocure |
Ambu AS and Novocure Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ambu AS and Novocure
The main advantage of trading using opposite Ambu AS and Novocure positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ambu AS position performs unexpectedly, Novocure 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 Novocure will offset losses from the drop in Novocure's long position.The idea behind Ambu AS and Novocure 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.| Novocure vs. Globus Medical | Novocure vs. Insulet | Novocure vs. Inspire Medical Systems | Novocure vs. Inari Medical |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
Other Complementary Tools
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| CEOs Directory Screen CEOs from public companies around the world | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios |