Correlation Between Ambu AS and Cortus Energy

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

By analyzing existing cross correlation between Ambu AS and Cortus Energy AB, you can compare the effects of market volatilities on Ambu AS and Cortus Energy 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 Cortus Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ambu AS and Cortus Energy.

Diversification Opportunities for Ambu AS and Cortus Energy

0.63

Correlation Coefficient

Ambu AS  Cortus Energy

Poor diversification

The 3 months correlation between Ambu and Cortus is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Ambu AS and Cortus Energy AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cortus Energy AB 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 Cortus Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cortus Energy AB has no effect on the direction of Ambu AS i.e., Ambu AS and Cortus Energy go up and down completely randomly.

Pair Corralation between Ambu AS and Cortus Energy

Assuming the 90 days trading horizon Ambu AS is expected to generate 2.05 times less return on investment than Cortus Energy. But when comparing it to its historical volatility, Ambu AS is 2.4 times less risky than Cortus Energy. It trades about 0.09 of its potential returns per unit of risk. Cortus Energy AB is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  15.00  in Cortus Energy AB on December 27, 2024 and sell it today you would earn a total of  3.00  from holding Cortus Energy AB or generate 20.0% return on investment over 90 days.

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

Ambu AS  vs.  Cortus Energy AB

Ambu AS

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Ambu AS are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unfluctuating fundamental drivers, Ambu AS sustained solid returns over the last few months and may actually be approaching a breakup point.

Cortus Energy AB

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Cortus Energy AB are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Cortus Energy unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Ambu AS and Cortus Energy

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

The idea behind Ambu AS and Cortus Energy AB 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.