Correlation Between Tempest Therapeutics and Ambu A/S
Can any of the company-specific risk be diversified away by investing in both Tempest Therapeutics 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 Tempest Therapeutics 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 Tempest Therapeutics and Ambu AS, you can compare the effects of market volatilities on Tempest Therapeutics 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 Tempest Therapeutics with a short position of Ambu A/S. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tempest Therapeutics and Ambu A/S.
Diversification Opportunities for Tempest Therapeutics and Ambu A/S
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Tempest and Ambu is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Tempest Therapeutics and Ambu AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ambu A/S and Tempest Therapeutics 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 Tempest Therapeutics 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 Tempest Therapeutics i.e., Tempest Therapeutics and Ambu A/S go up and down completely randomly.
Pair Corralation between Tempest Therapeutics and Ambu A/S
Given the investment horizon of 90 days Tempest Therapeutics is expected to generate 16.24 times more return on investment than Ambu A/S. However, Tempest Therapeutics is 16.24 times more volatile than Ambu AS. It trades about 0.03 of its potential returns per unit of risk. Ambu AS is currently generating about 0.05 per unit of risk. If you would invest 165.00 in Tempest Therapeutics on August 26, 2024 and sell it today you would lose (74.00) from holding Tempest Therapeutics or give up 44.85% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tempest Therapeutics vs. Ambu AS
Performance |
| Timeline |
| Tempest Therapeutics |
| Ambu A/S |
Tempest Therapeutics and Ambu A/S Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tempest Therapeutics and Ambu A/S
The main advantage of trading using opposite Tempest Therapeutics and Ambu A/S positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tempest Therapeutics 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.| Tempest Therapeutics vs. Eliem Therapeutics | Tempest Therapeutics vs. HCW Biologics | Tempest Therapeutics vs. Scpharmaceuticals | Tempest Therapeutics vs. Milestone Pharmaceuticals |
| Ambu A/S vs. Rezolute | Ambu A/S vs. Tempest Therapeutics | Ambu A/S vs. Forte Biosciences | Ambu A/S vs. Dyadic International |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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