Correlation Between Ambrus Core and Global Equity

Can any of the company-specific risk be diversified away by investing in both Ambrus Core and Global Equity 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 Global Equity 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 Global Equity Fund, you can compare the effects of market volatilities on Ambrus Core and Global Equity 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 Global Equity. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ambrus Core and Global Equity.

Diversification Opportunities for Ambrus Core and Global Equity

0.39

Correlation Coefficient

Ambrus Core  Global Equity

Weak diversification

The 3 months correlation between Ambrus and Global is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Ambrus Core Bond and Global Equity Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Equity 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 Global Equity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Equity has no effect on the direction of Ambrus Core i.e., Ambrus Core and Global Equity go up and down completely randomly.

Pair Corralation between Ambrus Core and Global Equity

Assuming the 90 days horizon Ambrus Core Bond is expected to generate 0.08 times more return on investment than Global Equity. However, Ambrus Core Bond is 12.89 times less risky than Global Equity. It trades about -0.07 of its potential returns per unit of risk. Global Equity Fund is currently generating about -0.27 per unit of risk. If you would invest  991.00  in Ambrus Core Bond on September 22, 2024 and sell it today you would lose (3.00) from holding Ambrus Core Bond or give up 0.3% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	95.45%
Values	Daily Returns

Ambrus Core Bond  vs.  Global Equity Fund

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.

Global Equity

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Global Equity Fund has generated negative risk-adjusted returns adding no value to fund investors. In spite of weak performance in the last few months, the Fund's technical and fundamental indicators remain fairly 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 fund investors.

Pair Trading with Ambrus Core and Global Equity

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

The idea behind Ambrus Core Bond and Global Equity Fund 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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.