Correlation Between Ambu AS and ShaMaran Petroleum

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

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

Diversification Opportunities for Ambu AS and ShaMaran Petroleum

-0.93

Correlation Coefficient

Ambu AS  ShaMaran Petroleum

Pay attention - limited upside

The 3 months correlation between Ambu and ShaMaran is -0.93. Overlapping area represents the amount of risk that can be diversified away by holding Ambu AS and ShaMaran Petroleum Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ShaMaran Petroleum Corp 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 ShaMaran Petroleum. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ShaMaran Petroleum Corp has no effect on the direction of Ambu AS i.e., Ambu AS and ShaMaran Petroleum go up and down completely randomly.

Pair Corralation between Ambu AS and ShaMaran Petroleum

Assuming the 90 days trading horizon Ambu AS is expected to under-perform the ShaMaran Petroleum. In addition to that, Ambu AS is 1.06 times more volatile than ShaMaran Petroleum Corp. It trades about -0.01 of its total potential returns per unit of risk. ShaMaran Petroleum Corp is currently generating about 0.55 per unit of volatility. If you would invest  87.00  in ShaMaran Petroleum Corp on October 10, 2024 and sell it today you would earn a total of  12.00  from holding ShaMaran Petroleum Corp or generate 13.79% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	94.44%
Values	Daily Returns

Ambu AS  vs.  ShaMaran Petroleum Corp

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 latest unfluctuating performance, the Stock's fundamental drivers remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

ShaMaran Petroleum Corp

Risk-Adjusted Performance

27 of 100

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in ShaMaran Petroleum Corp are ranked lower than 27 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain primary indicators, ShaMaran Petroleum unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Ambu AS and ShaMaran Petroleum

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

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