Correlation Between VCI Global and Ambipar Emergency

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

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

Diversification Opportunities for VCI Global and Ambipar Emergency

0.33

Correlation Coefficient

VCI Global  Ambipar Emergency

Weak diversification

The 3 months correlation between VCI and Ambipar is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding VCI Global Limited and Ambipar Emergency Response in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ambipar Emergency and VCI Global 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 VCI Global Limited 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 VCI Global i.e., VCI Global and Ambipar Emergency go up and down completely randomly.

Pair Corralation between VCI Global and Ambipar Emergency

Given the investment horizon of 90 days VCI Global Limited is expected to under-perform the Ambipar Emergency. In addition to that, VCI Global is 1.92 times more volatile than Ambipar Emergency Response. It trades about -0.21 of its total potential returns per unit of risk. Ambipar Emergency Response is currently generating about 0.02 per unit of volatility. If you would invest  555.00  in Ambipar Emergency Response on December 28, 2024 and sell it today you would lose (5.00) from holding Ambipar Emergency Response or give up 0.9% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.36%
Values	Daily Returns

VCI Global Limited  vs.  Ambipar Emergency Response

VCI Global Limited

Risk-Adjusted Performance

Very Weak

Over the last 90 days VCI Global Limited has generated negative risk-adjusted returns adding no value to investors with long positions. Despite inconsistent performance in the last few months, the Stock's forward indicators remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Ambipar Emergency

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Ambipar Emergency Response are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong fundamental drivers, Ambipar Emergency is not utilizing all of its potentials. The current stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with VCI Global and Ambipar Emergency

The main advantage of trading using opposite VCI Global and Ambipar Emergency positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VCI Global 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 VCI Global Limited 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.

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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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.