Correlation Between MASI AGRICOLA and AMBRA SA

Can any of the company-specific risk be diversified away by investing in both MASI AGRICOLA and AMBRA SA 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 MASI AGRICOLA and AMBRA SA into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between MASI AGRICOLA SPA and AMBRA SA A, you can compare the effects of market volatilities on MASI AGRICOLA and AMBRA SA 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 MASI AGRICOLA with a short position of AMBRA SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of MASI AGRICOLA and AMBRA SA.

Diversification Opportunities for MASI AGRICOLA and AMBRA SA

-0.29

Correlation Coefficient

MASI AGRICOLA  AMBRA SA

Very good diversification

The 3 months correlation between MASI and AMBRA is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding MASI AGRICOLA SPA and AMBRA SA A in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AMBRA SA A and MASI AGRICOLA 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 MASI AGRICOLA SPA are associated (or correlated) with AMBRA SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AMBRA SA A has no effect on the direction of MASI AGRICOLA i.e., MASI AGRICOLA and AMBRA SA go up and down completely randomly.

Pair Corralation between MASI AGRICOLA and AMBRA SA

Assuming the 90 days horizon MASI AGRICOLA SPA is expected to under-perform the AMBRA SA. But the stock apears to be less risky and, when comparing its historical volatility, MASI AGRICOLA SPA is 2.31 times less risky than AMBRA SA. The stock trades about -0.02 of its potential returns per unit of risk. The AMBRA SA A is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  437.00  in AMBRA SA A on December 10, 2024 and sell it today you would earn a total of  75.00  from holding AMBRA SA A or generate 17.16% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

MASI AGRICOLA SPA  vs.  AMBRA SA A

MASI AGRICOLA SPA

Risk-Adjusted Performance

Very Weak

Over the last 90 days MASI AGRICOLA SPA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, MASI AGRICOLA is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

AMBRA SA A

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in AMBRA SA A are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, AMBRA SA may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with MASI AGRICOLA and AMBRA SA

The main advantage of trading using opposite MASI AGRICOLA and AMBRA SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MASI AGRICOLA position performs unexpectedly, AMBRA SA 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 AMBRA SA will offset losses from the drop in AMBRA SA's long position.

The idea behind MASI AGRICOLA SPA and AMBRA SA A 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.

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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.