Correlation Between Ambipar Participaes and Cable One
Can any of the company-specific risk be diversified away by investing in both Ambipar Participaes and Cable One 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 Ambipar Participaes and Cable One into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ambipar Participaes e and Cable One, you can compare the effects of market volatilities on Ambipar Participaes and Cable One 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 Ambipar Participaes with a short position of Cable One. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ambipar Participaes and Cable One.
Diversification Opportunities for Ambipar Participaes and Cable One
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Ambipar and Cable is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Ambipar Participaes e and Cable One in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cable One and Ambipar Participaes 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 Ambipar Participaes e are associated (or correlated) with Cable One. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cable One has no effect on the direction of Ambipar Participaes i.e., Ambipar Participaes and Cable One go up and down completely randomly.
Pair Corralation between Ambipar Participaes and Cable One
Assuming the 90 days trading horizon Ambipar Participaes e is expected to generate 2.83 times more return on investment than Cable One. However, Ambipar Participaes is 2.83 times more volatile than Cable One. It trades about 0.22 of its potential returns per unit of risk. Cable One is currently generating about 0.52 per unit of risk. If you would invest 13,240 in Ambipar Participaes e on August 27, 2024 and sell it today you would earn a total of 3,310 from holding Ambipar Participaes e or generate 25.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ambipar Participaes e vs. Cable One
Performance |
| Timeline |
| Ambipar Participaes |
| Cable One |
Ambipar Participaes and Cable One Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ambipar Participaes and Cable One
The main advantage of trading using opposite Ambipar Participaes and Cable One positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ambipar Participaes position performs unexpectedly, Cable One 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 Cable One will offset losses from the drop in Cable One's long position.| Ambipar Participaes vs. SIMPAR SA | Ambipar Participaes vs. Pet Center Comrcio | Ambipar Participaes vs. Movida Participaes SA |
| Cable One vs. Extra Space Storage | Cable One vs. Ross Stores | Cable One vs. Delta Air Lines | Cable One vs. Unifique Telecomunicaes SA |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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