Correlation Between Ambu AS and GomSpace Group
Can any of the company-specific risk be diversified away by investing in both Ambu AS and GomSpace Group 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 GomSpace Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ambu AS and GomSpace Group AB, you can compare the effects of market volatilities on Ambu AS and GomSpace Group 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 GomSpace Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ambu AS and GomSpace Group.
Diversification Opportunities for Ambu AS and GomSpace Group
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Ambu and GomSpace is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Ambu AS and GomSpace Group AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GomSpace Group AB 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 GomSpace Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GomSpace Group AB has no effect on the direction of Ambu AS i.e., Ambu AS and GomSpace Group go up and down completely randomly.
Pair Corralation between Ambu AS and GomSpace Group
Assuming the 90 days trading horizon Ambu AS is expected to under-perform the GomSpace Group. But the stock apears to be less risky and, when comparing its historical volatility, Ambu AS is 1.11 times less risky than GomSpace Group. The stock trades about -0.23 of its potential returns per unit of risk. The GomSpace Group AB is currently generating about 0.27 of returns per unit of risk over similar time horizon. If you would invest 377.00 in GomSpace Group AB on August 30, 2024 and sell it today you would earn a total of 80.00 from holding GomSpace Group AB or generate 21.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ambu AS vs. GomSpace Group AB
Performance |
| Timeline |
| Ambu AS |
| GomSpace Group AB |
Ambu AS and GomSpace Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ambu AS and GomSpace Group
The main advantage of trading using opposite Ambu AS and GomSpace Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ambu AS position performs unexpectedly, GomSpace Group 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 GomSpace Group will offset losses from the drop in GomSpace Group's long position.The idea behind Ambu AS and GomSpace Group 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.| GomSpace Group vs. Troax Group AB | GomSpace Group vs. NIBE Industrier AB | GomSpace Group vs. Hexatronic Group AB | GomSpace Group vs. Bufab Holding AB |
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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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