Correlation Between Ambu AS and Vestas Wind
Can any of the company-specific risk be diversified away by investing in both Ambu AS and Vestas Wind 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 Vestas Wind into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ambu AS and Vestas Wind Systems, you can compare the effects of market volatilities on Ambu AS and Vestas Wind 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 Vestas Wind. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ambu AS and Vestas Wind.
Diversification Opportunities for Ambu AS and Vestas Wind
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Ambu and Vestas is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Ambu AS and Vestas Wind Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vestas Wind Systems 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 Vestas Wind. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vestas Wind Systems has no effect on the direction of Ambu AS i.e., Ambu AS and Vestas Wind go up and down completely randomly.
Pair Corralation between Ambu AS and Vestas Wind
Assuming the 90 days trading horizon Ambu AS is expected to generate 0.95 times more return on investment than Vestas Wind. However, Ambu AS is 1.06 times less risky than Vestas Wind. It trades about 0.04 of its potential returns per unit of risk. Vestas Wind Systems is currently generating about -0.04 per unit of risk. If you would invest 9,087 in Ambu AS on September 12, 2024 and sell it today you would earn a total of 1,913 from holding Ambu AS or generate 21.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ambu AS vs. Vestas Wind Systems
Performance |
| Timeline |
| Ambu AS |
| Vestas Wind Systems |
Ambu AS and Vestas Wind Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ambu AS and Vestas Wind
The main advantage of trading using opposite Ambu AS and Vestas Wind positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ambu AS position performs unexpectedly, Vestas Wind 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 Vestas Wind will offset losses from the drop in Vestas Wind'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 |
| Vestas Wind vs. Genmab AS | Vestas Wind vs. Danske Bank AS | Vestas Wind vs. Ambu AS | Vestas Wind vs. FLSmidth Co |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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