Correlation Between Ambipar Emergency and Anaergia

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

By analyzing existing cross correlation between Ambipar Emergency Response and Anaergia, you can compare the effects of market volatilities on Ambipar Emergency and Anaergia 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 Ambipar Emergency with a short position of Anaergia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ambipar Emergency and Anaergia.

Diversification Opportunities for Ambipar Emergency and Anaergia

0.04

Correlation Coefficient

Ambipar Emergency  Anaergia

Significant diversification

The 3 months correlation between Ambipar and Anaergia is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Ambipar Emergency Response and Anaergia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Anaergia and Ambipar Emergency 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 Ambipar Emergency Response are associated (or correlated) with Anaergia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Anaergia has no effect on the direction of Ambipar Emergency i.e., Ambipar Emergency and Anaergia go up and down completely randomly.

Pair Corralation between Ambipar Emergency and Anaergia

Given the investment horizon of 90 days Ambipar Emergency Response is expected to under-perform the Anaergia. But the stock apears to be less risky and, when comparing its historical volatility, Ambipar Emergency Response is 1.18 times less risky than Anaergia. The stock trades about -0.01 of its potential returns per unit of risk. The Anaergia is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  62.00  in Anaergia on December 29, 2024 and sell it today you would earn a total of  7.00  from holding Anaergia or generate 11.29% return on investment over 90 days.

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

Ambipar Emergency Response  vs.  Anaergia

Ambipar Emergency

Risk-Adjusted Performance

Very Weak

Over the last 90 days Ambipar Emergency Response has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong fundamental drivers, Ambipar Emergency is not utilizing all of its potentials. The current stock price confusion, may contribute to short-horizon losses for the traders.

Anaergia

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Anaergia are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile technical and fundamental indicators, Anaergia reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Ambipar Emergency and Anaergia

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

The idea behind Ambipar Emergency Response and Anaergia 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.