Correlation Between Ambu AS and Dataproces Group

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

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

Diversification Opportunities for Ambu AS and Dataproces Group

-0.53

Correlation Coefficient

Ambu AS  Dataproces Group

Excellent diversification

The 3 months correlation between Ambu and Dataproces is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Ambu AS and Dataproces Group AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dataproces Group 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 Dataproces Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dataproces Group has no effect on the direction of Ambu AS i.e., Ambu AS and Dataproces Group go up and down completely randomly.

Pair Corralation between Ambu AS and Dataproces Group

Assuming the 90 days trading horizon Ambu AS is expected to generate 8.09 times less return on investment than Dataproces Group. But when comparing it to its historical volatility, Ambu AS is 1.43 times less risky than Dataproces Group. It trades about 0.03 of its potential returns per unit of risk. Dataproces Group AS is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest  199.00  in Dataproces Group AS on September 14, 2024 and sell it today you would earn a total of  401.00  from holding Dataproces Group AS or generate 201.51% return on investment over 90 days.

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

Ambu AS  vs.  Dataproces Group AS

Ambu AS

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ambu AS has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unfluctuating performance in the last few months, the Stock's fundamental drivers remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Dataproces Group

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Dataproces Group AS are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Dataproces Group displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Ambu AS and Dataproces Group

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

The idea behind Ambu AS and Dataproces Group AS 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.