Correlation Between Onxeo SA and Ambac Financial
Can any of the company-specific risk be diversified away by investing in both Onxeo SA and Ambac Financial 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 Onxeo SA and Ambac Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Onxeo SA and Ambac Financial Group, you can compare the effects of market volatilities on Onxeo SA and Ambac Financial 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 Onxeo SA with a short position of Ambac Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Onxeo SA and Ambac Financial.
Diversification Opportunities for Onxeo SA and Ambac Financial
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Onxeo and Ambac is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Onxeo SA and Ambac Financial Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ambac Financial Group and Onxeo SA 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 Onxeo SA are associated (or correlated) with Ambac Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ambac Financial Group has no effect on the direction of Onxeo SA i.e., Onxeo SA and Ambac Financial go up and down completely randomly.
Pair Corralation between Onxeo SA and Ambac Financial
Assuming the 90 days horizon Onxeo SA is expected to generate 3.28 times more return on investment than Ambac Financial. However, Onxeo SA is 3.28 times more volatile than Ambac Financial Group. It trades about -0.01 of its potential returns per unit of risk. Ambac Financial Group is currently generating about -0.03 per unit of risk. If you would invest 30.00 in Onxeo SA on December 10, 2024 and sell it today you would lose (24.60) from holding Onxeo SA or give up 82.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Onxeo SA vs. Ambac Financial Group
Performance |
| Timeline |
| Onxeo SA |
| Ambac Financial Group |
Onxeo SA and Ambac Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Onxeo SA and Ambac Financial
The main advantage of trading using opposite Onxeo SA and Ambac Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Onxeo SA position performs unexpectedly, Ambac Financial 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 Ambac Financial will offset losses from the drop in Ambac Financial's long position.| Onxeo SA vs. Novo Nordisk AS | Onxeo SA vs. CSL LTD SPONADR | Onxeo SA vs. CSL Limited | Onxeo SA vs. Mercedes Benz Group AG |
| Ambac Financial vs. CAREER EDUCATION | Ambac Financial vs. Grand Canyon Education | Ambac Financial vs. Corporate Travel Management | Ambac Financial vs. Laureate Education |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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