Correlation Between TRAVEL + and Ambea AB
Can any of the company-specific risk be diversified away by investing in both TRAVEL + 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 TRAVEL + and Ambea AB into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TRAVEL LEISURE DL 01 and Ambea AB, you can compare the effects of market volatilities on TRAVEL + 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 TRAVEL + with a short position of Ambea AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of TRAVEL + and Ambea AB.
Diversification Opportunities for TRAVEL + and Ambea AB
Poor diversification
The 3 months correlation between TRAVEL and Ambea is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding TRAVEL LEISURE DL 01 and Ambea AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ambea AB and TRAVEL + 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 TRAVEL LEISURE DL 01 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 TRAVEL + i.e., TRAVEL + and Ambea AB go up and down completely randomly.
Pair Corralation between TRAVEL + and Ambea AB
Assuming the 90 days trading horizon TRAVEL LEISURE DL 01 is expected to generate 0.44 times more return on investment than Ambea AB. However, TRAVEL LEISURE DL 01 is 2.27 times less risky than Ambea AB. It trades about 0.23 of its potential returns per unit of risk. Ambea AB is currently generating about -0.04 per unit of risk. If you would invest 4,860 in TRAVEL LEISURE DL 01 on October 22, 2024 and sell it today you would earn a total of 190.00 from holding TRAVEL LEISURE DL 01 or generate 3.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
TRAVEL LEISURE DL 01 vs. Ambea AB
Performance |
| Timeline |
| TRAVEL LEISURE DL |
| Ambea AB |
TRAVEL + and Ambea AB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TRAVEL + and Ambea AB
The main advantage of trading using opposite TRAVEL + and Ambea AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TRAVEL + 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.| TRAVEL + vs. Jupiter Fund Management | TRAVEL + vs. DeVry Education Group | TRAVEL + vs. CeoTronics AG | TRAVEL + vs. Xinhua Winshare Publishing |
| Ambea AB vs. MOVIE GAMES SA | Ambea AB vs. Boyd Gaming | Ambea AB vs. ecotel communication ag | Ambea AB vs. GAMESTOP |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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