Correlation Between Ambu AS and United Parcel
Can any of the company-specific risk be diversified away by investing in both Ambu AS and United Parcel 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 Ambu AS and United Parcel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ambu AS and United Parcel Service, you can compare the effects of market volatilities on Ambu AS and United Parcel 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 Ambu AS with a short position of United Parcel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ambu AS and United Parcel.
Diversification Opportunities for Ambu AS and United Parcel
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Ambu and United is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Ambu AS and United Parcel Service in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on United Parcel Service and Ambu AS 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 Ambu AS are associated (or correlated) with United Parcel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of United Parcel Service has no effect on the direction of Ambu AS i.e., Ambu AS and United Parcel go up and down completely randomly.
Pair Corralation between Ambu AS and United Parcel
Assuming the 90 days trading horizon Ambu AS is expected to generate 1.75 times less return on investment than United Parcel. In addition to that, Ambu AS is 1.45 times more volatile than United Parcel Service. It trades about 0.03 of its total potential returns per unit of risk. United Parcel Service is currently generating about 0.07 per unit of volatility. If you would invest 14,379 in United Parcel Service on January 26, 2024 and sell it today you would earn a total of 283.00 from holding United Parcel Service or generate 1.97% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 90.48% |
Values | Daily Returns |
Ambu AS vs. United Parcel Service
Performance |
Timeline |
Ambu AS |
United Parcel Service |
Ambu AS and United Parcel Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Ambu AS and United Parcel
The main advantage of trading using opposite Ambu AS and United Parcel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ambu AS position performs unexpectedly, United Parcel 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 United Parcel will offset losses from the drop in United Parcel's long position.Ambu AS vs. Bavarian Nordic | Ambu AS vs. Genmab AS | Ambu AS vs. GN Store Nord | Ambu AS vs. DSV Panalpina AS |
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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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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