Correlation Between BioPorto and Ambu AS
Can any of the company-specific risk be diversified away by investing in both BioPorto and Ambu 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 BioPorto and Ambu AS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BioPorto and Ambu AS, you can compare the effects of market volatilities on BioPorto and Ambu 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 BioPorto with a short position of Ambu AS. Check out your portfolio center. Please also check ongoing floating volatility patterns of BioPorto and Ambu AS.
Diversification Opportunities for BioPorto and Ambu AS
Significant diversification
The 3 months correlation between BioPorto and Ambu is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding BioPorto and Ambu AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ambu AS and BioPorto 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 BioPorto are associated (or correlated) with Ambu AS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ambu AS has no effect on the direction of BioPorto i.e., BioPorto and Ambu AS go up and down completely randomly.
Pair Corralation between BioPorto and Ambu AS
Assuming the 90 days trading horizon BioPorto is expected to generate 725.86 times less return on investment than Ambu AS. But when comparing it to its historical volatility, BioPorto is 1.07 times less risky than Ambu AS. It trades about 0.0 of its potential returns per unit of risk. Ambu AS is currently generating about 0.34 of returns per unit of risk over similar time horizon. If you would invest 10,615 in Ambu AS on October 24, 2024 and sell it today you would earn a total of 2,915 from holding Ambu AS or generate 27.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
BioPorto vs. Ambu AS
Performance |
| Timeline |
| BioPorto |
| Ambu AS |
BioPorto and Ambu AS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BioPorto and Ambu AS
The main advantage of trading using opposite BioPorto and Ambu AS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BioPorto position performs unexpectedly, Ambu 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 Ambu AS will offset losses from the drop in Ambu AS's long position.The idea behind BioPorto and Ambu AS 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.| 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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