Correlation Between Nasdaq and Ambea AB
Can any of the company-specific risk be diversified away by investing in both Nasdaq and Ambea AB 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 Nasdaq and Ambea AB into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nasdaq Inc and Ambea AB, you can compare the effects of market volatilities on Nasdaq and Ambea AB 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 Nasdaq with a short position of Ambea AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nasdaq and Ambea AB.
Diversification Opportunities for Nasdaq and Ambea AB
Poor diversification
The 3 months correlation between Nasdaq and Ambea is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Nasdaq Inc and Ambea AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ambea AB and Nasdaq 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 Nasdaq Inc are associated (or correlated) with Ambea AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ambea AB has no effect on the direction of Nasdaq i.e., Nasdaq and Ambea AB go up and down completely randomly.
Pair Corralation between Nasdaq and Ambea AB
Given the investment horizon of 90 days Nasdaq Inc is expected to generate 0.69 times more return on investment than Ambea AB. However, Nasdaq Inc is 1.46 times less risky than Ambea AB. It trades about 0.12 of its potential returns per unit of risk. Ambea AB is currently generating about 0.05 per unit of risk. If you would invest 7,890 in Nasdaq Inc on September 13, 2024 and sell it today you would earn a total of 197.00 from holding Nasdaq Inc or generate 2.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Nasdaq Inc vs. Ambea AB
Performance |
| Timeline |
| Nasdaq Inc |
| Ambea AB |
Nasdaq and Ambea AB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nasdaq and Ambea AB
The main advantage of trading using opposite Nasdaq and Ambea AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nasdaq position performs unexpectedly, Ambea AB 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 Ambea AB will offset losses from the drop in Ambea AB's long position.The idea behind Nasdaq Inc and Ambea 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.| Ambea AB vs. CHIBA BANK | Ambea AB vs. Carsales | Ambea AB vs. The Hanover Insurance | Ambea AB vs. Webster Financial |
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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