Correlation Between Anaergia and Ambipar Emergency

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

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

Diversification Opportunities for Anaergia and Ambipar Emergency

0.16

Correlation Coefficient

Anaergia  Ambipar Emergency

Average diversification

The 3 months correlation between Anaergia and Ambipar is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Anaergia and Ambipar Emergency Response in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ambipar Emergency and Anaergia 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 Anaergia are associated (or correlated) with Ambipar Emergency. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ambipar Emergency has no effect on the direction of Anaergia i.e., Anaergia and Ambipar Emergency go up and down completely randomly.

Pair Corralation between Anaergia and Ambipar Emergency

Assuming the 90 days horizon Anaergia is expected to generate 3.6 times more return on investment than Ambipar Emergency. However, Anaergia is 3.6 times more volatile than Ambipar Emergency Response. It trades about 0.11 of its potential returns per unit of risk. Ambipar Emergency Response is currently generating about 0.08 per unit of risk. If you would invest  43.00  in Anaergia on September 13, 2024 and sell it today you would earn a total of  20.00  from holding Anaergia or generate 46.51% return on investment over 90 days.

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

Anaergia  vs.  Ambipar Emergency Response

Anaergia

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Anaergia are ranked lower than 8 (%) 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.

Ambipar Emergency

Risk-Adjusted Performance

6 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Ambipar Emergency Response are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite fairly uncertain fundamental drivers, Ambipar Emergency demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Anaergia and Ambipar Emergency

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

The idea behind Anaergia and Ambipar Emergency Response 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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.