Correlation Between H Lundbeck and Ambu AS
Can any of the company-specific risk be diversified away by investing in both H Lundbeck 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 H Lundbeck and Ambu AS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between H Lundbeck AS and Ambu AS, you can compare the effects of market volatilities on H Lundbeck 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 H Lundbeck with a short position of Ambu AS. Check out your portfolio center. Please also check ongoing floating volatility patterns of H Lundbeck and Ambu AS.
Diversification Opportunities for H Lundbeck and Ambu AS
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between HLUN-A and Ambu is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding H Lundbeck AS and Ambu AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ambu AS and H Lundbeck 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 H Lundbeck AS 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 H Lundbeck i.e., H Lundbeck and Ambu AS go up and down completely randomly.
Pair Corralation between H Lundbeck and Ambu AS
Assuming the 90 days trading horizon H Lundbeck AS is expected to generate 0.68 times more return on investment than Ambu AS. However, H Lundbeck AS is 1.47 times less risky than Ambu AS. It trades about 0.03 of its potential returns per unit of risk. Ambu AS is currently generating about -0.19 per unit of risk. If you would invest 3,580 in H Lundbeck AS on September 1, 2024 and sell it today you would earn a total of 40.00 from holding H Lundbeck AS or generate 1.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
H Lundbeck AS vs. Ambu AS
Performance |
| Timeline |
| H Lundbeck AS |
| Ambu AS |
H Lundbeck and Ambu AS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with H Lundbeck and Ambu AS
The main advantage of trading using opposite H Lundbeck and Ambu AS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if H Lundbeck 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.| H Lundbeck vs. H Lundbeck AS | H Lundbeck vs. GN Store Nord | H Lundbeck vs. Nordea Bank Abp | H Lundbeck vs. FLSmidth Co |
| 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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