Correlation Between Ambu AS and DFDS AS
Can any of the company-specific risk be diversified away by investing in both Ambu AS and DFDS AS 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 DFDS AS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ambu AS and DFDS AS, you can compare the effects of market volatilities on Ambu AS and DFDS AS 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 DFDS AS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ambu AS and DFDS AS.
Diversification Opportunities for Ambu AS and DFDS AS
Poor diversification
The 3 months correlation between Ambu and DFDS is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Ambu AS and DFDS AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DFDS AS 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 DFDS AS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DFDS AS has no effect on the direction of Ambu AS i.e., Ambu AS and DFDS AS go up and down completely randomly.
Pair Corralation between Ambu AS and DFDS AS
Assuming the 90 days trading horizon Ambu AS is expected to generate 1.4 times more return on investment than DFDS AS. However, Ambu AS is 1.4 times more volatile than DFDS AS. It trades about -0.05 of its potential returns per unit of risk. DFDS AS is currently generating about -0.17 per unit of risk. If you would invest 13,650 in Ambu AS on September 3, 2024 and sell it today you would lose (2,550) from holding Ambu AS or give up 18.68% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ambu AS vs. DFDS AS
Performance |
| Timeline |
| Ambu AS |
| DFDS AS |
Ambu AS and DFDS AS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ambu AS and DFDS AS
The main advantage of trading using opposite Ambu AS and DFDS AS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ambu AS position performs unexpectedly, DFDS AS 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 DFDS AS will offset losses from the drop in DFDS AS'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 |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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