Correlation Between Insulet and Ambu AS
Can any of the company-specific risk be diversified away by investing in both Insulet 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 Insulet and Ambu AS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Insulet and Ambu AS, you can compare the effects of market volatilities on Insulet 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 Insulet with a short position of Ambu AS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Insulet and Ambu AS.
Diversification Opportunities for Insulet and Ambu AS
Modest diversification
The 3 months correlation between Insulet and Ambu is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Insulet and Ambu AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ambu AS and Insulet 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 Insulet 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 Insulet i.e., Insulet and Ambu AS go up and down completely randomly.
Pair Corralation between Insulet and Ambu AS
If you would invest 23,153 in Insulet on September 1, 2024 and sell it today you would earn a total of 3,525 from holding Insulet or generate 15.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 91.3% |
| Values | Daily Returns |
Insulet vs. Ambu AS
Performance |
| Timeline |
| Insulet |
| Ambu AS |
Insulet and Ambu AS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Insulet and Ambu AS
The main advantage of trading using opposite Insulet and Ambu AS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Insulet 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 Insulet 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.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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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