Correlation Between Ambu AS and Africa Oil
Can any of the company-specific risk be diversified away by investing in both Ambu AS and Africa Oil 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 Africa Oil into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ambu AS and Africa Oil Corp, you can compare the effects of market volatilities on Ambu AS and Africa Oil 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 Africa Oil. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ambu AS and Africa Oil.
Diversification Opportunities for Ambu AS and Africa Oil
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Ambu and Africa is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Ambu AS and Africa Oil Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Africa Oil Corp 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 Africa Oil. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Africa Oil Corp has no effect on the direction of Ambu AS i.e., Ambu AS and Africa Oil go up and down completely randomly.
Pair Corralation between Ambu AS and Africa Oil
Assuming the 90 days trading horizon Ambu AS is expected to generate 1.81 times more return on investment than Africa Oil. However, Ambu AS is 1.81 times more volatile than Africa Oil Corp. It trades about 0.33 of its potential returns per unit of risk. Africa Oil Corp is currently generating about 0.25 per unit of risk. If you would invest 10,780 in Ambu AS on October 13, 2024 and sell it today you would earn a total of 2,825 from holding Ambu AS or generate 26.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 94.12% |
| Values | Daily Returns |
Ambu AS vs. Africa Oil Corp
Performance |
| Timeline |
| Ambu AS |
| Africa Oil Corp |
Ambu AS and Africa Oil Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ambu AS and Africa Oil
The main advantage of trading using opposite Ambu AS and Africa Oil positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ambu AS position performs unexpectedly, Africa Oil 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 Africa Oil will offset losses from the drop in Africa Oil's long position.| Ambu AS vs. Bavarian Nordic | Ambu AS vs. Genmab AS | Ambu AS vs. GN Store Nord | Ambu AS vs. DSV Panalpina AS |
| Africa Oil vs. International Petroleum | Africa Oil vs. Africa Energy Corp | Africa Oil vs. Africa Oil Corp | Africa Oil vs. Lundin Mining |
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 Stocks Directory module to find actively traded stocks across global markets.
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