Correlation Between ViroGates and Ambu AS

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

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

Diversification Opportunities for ViroGates and Ambu AS

-0.8

Correlation Coefficient

ViroGates  Ambu AS

Pay attention - limited upside

The 3 months correlation between ViroGates and Ambu is -0.8. Overlapping area represents the amount of risk that can be diversified away by holding ViroGates AS and Ambu AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ambu AS and ViroGates 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 ViroGates AS are associated (or correlated) with Ambu AS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ambu AS has no effect on the direction of ViroGates i.e., ViroGates and Ambu AS go up and down completely randomly.

Pair Corralation between ViroGates and Ambu AS

Assuming the 90 days trading horizon ViroGates AS is expected to generate 5.23 times more return on investment than Ambu AS. However, ViroGates is 5.23 times more volatile than Ambu AS. It trades about 0.17 of its potential returns per unit of risk. Ambu AS is currently generating about -0.1 per unit of risk. If you would invest  565.00  in ViroGates AS on September 2, 2024 and sell it today you would earn a total of  805.00  from holding ViroGates AS or generate 142.48% return on investment over 90 days.

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

ViroGates AS  vs.  Ambu AS

ViroGates AS

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in ViroGates AS are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of very weak basic indicators, ViroGates displayed solid returns over the last few months and may actually be approaching a breakup point.

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 unfluctuating performance in the last few months, the Stock's fundamental drivers remain somewhat 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 company investors.

Pair Trading with ViroGates and Ambu AS

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

The idea behind ViroGates AS and Ambu AS 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.