Correlation Between Ambrus Core and Bats Series

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

By analyzing existing cross correlation between Ambrus Core Bond and Bats Series S, you can compare the effects of market volatilities on Ambrus Core and Bats Series 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 Ambrus Core with a short position of Bats Series. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ambrus Core and Bats Series.

Diversification Opportunities for Ambrus Core and Bats Series

0.4

Correlation Coefficient

Ambrus Core  Bats Series

Very weak diversification

The 3 months correlation between Ambrus and Bats is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Ambrus Core Bond and Bats Series S in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bats Series S and Ambrus Core 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 Ambrus Core Bond are associated (or correlated) with Bats Series. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bats Series S has no effect on the direction of Ambrus Core i.e., Ambrus Core and Bats Series go up and down completely randomly.

Pair Corralation between Ambrus Core and Bats Series

Assuming the 90 days horizon Ambrus Core Bond is expected to under-perform the Bats Series. In addition to that, Ambrus Core is 2.79 times more volatile than Bats Series S. It trades about -0.39 of its total potential returns per unit of risk. Bats Series S is currently generating about -0.18 per unit of volatility. If you would invest  921.00  in Bats Series S on October 11, 2024 and sell it today you would lose (2.00) from holding Bats Series S or give up 0.22% of portfolio value over 90 days.

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

Ambrus Core Bond  vs.  Bats Series S

Ambrus Core Bond

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ambrus Core Bond has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong fundamental drivers, Ambrus Core is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Bats Series S

Risk-Adjusted Performance

0 of 100

Weak

Over the last 90 days Bats Series S has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Bats Series is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Ambrus Core and Bats Series

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

The idea behind Ambrus Core Bond and Bats Series S 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.