Correlation Between AMBRA SA and AS Latvijas

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

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

Diversification Opportunities for AMBRA SA and AS Latvijas

-0.14

Correlation Coefficient

AMBRA SA  AS Latvijas

Good diversification

The 3 months correlation between AMBRA and UM9 is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding AMBRA SA A and AS Latvijas balzams in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AS Latvijas balzams and AMBRA SA 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 AMBRA SA A are associated (or correlated) with AS Latvijas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AS Latvijas balzams has no effect on the direction of AMBRA SA i.e., AMBRA SA and AS Latvijas go up and down completely randomly.

Pair Corralation between AMBRA SA and AS Latvijas

Assuming the 90 days horizon AMBRA SA A is expected to generate 5.31 times more return on investment than AS Latvijas. However, AMBRA SA is 5.31 times more volatile than AS Latvijas balzams. It trades about 0.05 of its potential returns per unit of risk. AS Latvijas balzams is currently generating about 0.12 per unit of risk. If you would invest  500.00  in AMBRA SA A on December 26, 2024 and sell it today you would earn a total of  36.00  from holding AMBRA SA A or generate 7.2% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.39%
Values	Daily Returns

AMBRA SA A  vs.  AS Latvijas balzams

AMBRA SA A

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in AMBRA SA A are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, AMBRA SA reported solid returns over the last few months and may actually be approaching a breakup point.

AS Latvijas balzams

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in AS Latvijas balzams are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, AS Latvijas may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with AMBRA SA and AS Latvijas

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

The idea behind AMBRA SA A and AS Latvijas balzams 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.

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.