Correlation Between Adler Group and Ambase Corp

Can any of the company-specific risk be diversified away by investing in both Adler Group and Ambase Corp 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 Adler Group and Ambase Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Adler Group SA and Ambase Corp, you can compare the effects of market volatilities on Adler Group and Ambase Corp 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 Adler Group with a short position of Ambase Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Adler Group and Ambase Corp.

Diversification Opportunities for Adler Group and Ambase Corp

-0.13

Correlation Coefficient

Adler Group  Ambase Corp

Good diversification

The 3 months correlation between Adler and Ambase is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Adler Group SA and Ambase Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ambase Corp and Adler Group 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 Adler Group SA are associated (or correlated) with Ambase Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ambase Corp has no effect on the direction of Adler Group i.e., Adler Group and Ambase Corp go up and down completely randomly.

Pair Corralation between Adler Group and Ambase Corp

If you would invest  35.00  in Adler Group SA on December 28, 2024 and sell it today you would earn a total of  0.00  from holding Adler Group SA or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	43.33%
Values	Daily Returns

Adler Group SA  vs.  Ambase Corp

Adler Group SA

Risk-Adjusted Performance

Very Weak

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

Ambase Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days Ambase Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable fundamental indicators, Ambase Corp is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Adler Group and Ambase Corp

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

The idea behind Adler Group SA and Ambase Corp 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.