Correlation Between Snap and Ambu A/S
Can any of the company-specific risk be diversified away by investing in both Snap and Ambu A/S 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 Snap and Ambu A/S into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Snap Inc and Ambu AS, you can compare the effects of market volatilities on Snap and Ambu A/S 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 Snap with a short position of Ambu A/S. Check out your portfolio center. Please also check ongoing floating volatility patterns of Snap and Ambu A/S.
Diversification Opportunities for Snap and Ambu A/S
Weak diversification
The 3 months correlation between Snap and Ambu is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Snap Inc and Ambu AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ambu A/S and Snap 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 Snap Inc are associated (or correlated) with Ambu A/S. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ambu A/S has no effect on the direction of Snap i.e., Snap and Ambu A/S go up and down completely randomly.
Pair Corralation between Snap and Ambu A/S
Given the investment horizon of 90 days Snap Inc is expected to under-perform the Ambu A/S. In addition to that, Snap is 4.17 times more volatile than Ambu AS. It trades about -0.03 of its total potential returns per unit of risk. Ambu AS is currently generating about 0.07 per unit of volatility. If you would invest 1,850 in Ambu AS on August 29, 2024 and sell it today you would earn a total of 140.00 from holding Ambu AS or generate 7.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.21% |
| Values | Daily Returns |
Snap Inc vs. Ambu AS
Performance |
| Timeline |
| Snap Inc |
| Ambu A/S |
Snap and Ambu A/S Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Snap and Ambu A/S
The main advantage of trading using opposite Snap and Ambu A/S positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Snap position performs unexpectedly, Ambu A/S 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 A/S will offset losses from the drop in Ambu A/S's long position.The idea behind Snap Inc 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 A/S vs. Insulet | Ambu A/S vs. Globus Medical | Ambu A/S vs. Novocure | Ambu A/S vs. Bio Rad Laboratories |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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