Correlation Between Ambu AS and Green Hydrogen

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

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

Diversification Opportunities for Ambu AS and Green Hydrogen

0.59

Correlation Coefficient

Ambu AS  Green Hydrogen

Very weak diversification

The 3 months correlation between Ambu and Green is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Ambu AS and Green Hydrogen Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Green Hydrogen Systems 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 Green Hydrogen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Green Hydrogen Systems has no effect on the direction of Ambu AS i.e., Ambu AS and Green Hydrogen go up and down completely randomly.

Pair Corralation between Ambu AS and Green Hydrogen

Assuming the 90 days trading horizon Ambu AS is expected to generate 0.24 times more return on investment than Green Hydrogen. However, Ambu AS is 4.2 times less risky than Green Hydrogen. It trades about -0.1 of its potential returns per unit of risk. Green Hydrogen Systems is currently generating about -0.03 per unit of risk. If you would invest  12,995  in Ambu AS on September 3, 2024 and sell it today you would lose (1,895) from holding Ambu AS or give up 14.58% of portfolio value over 90 days.

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

Ambu AS  vs.  Green Hydrogen Systems

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.

Green Hydrogen Systems

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Green Hydrogen Systems has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's technical and fundamental indicators 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.

Pair Trading with Ambu AS and Green Hydrogen

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

The idea behind Ambu AS and Green Hydrogen Systems 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.