Correlation Between Willdan and Ambipar Emergency

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

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

Diversification Opportunities for Willdan and Ambipar Emergency

0.26

Correlation Coefficient

Willdan  Ambipar Emergency

Modest diversification

The 3 months correlation between Willdan and Ambipar is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Willdan Group and Ambipar Emergency Response in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ambipar Emergency and Willdan 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 Willdan Group 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 Willdan i.e., Willdan and Ambipar Emergency go up and down completely randomly.

Pair Corralation between Willdan and Ambipar Emergency

Given the investment horizon of 90 days Willdan Group is expected to generate 0.93 times more return on investment than Ambipar Emergency. However, Willdan Group is 1.07 times less risky than Ambipar Emergency. It trades about 0.04 of its potential returns per unit of risk. Ambipar Emergency Response is currently generating about -0.01 per unit of risk. If you would invest  3,836  in Willdan Group on December 29, 2024 and sell it today you would earn a total of  261.00  from holding Willdan Group or generate 6.8% return on investment over 90 days.

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

Willdan Group  vs.  Ambipar Emergency Response

Willdan Group

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Willdan Group are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of very fragile fundamental indicators, Willdan may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Ambipar Emergency

Risk-Adjusted Performance

Very Weak

Over the last 90 days Ambipar Emergency Response has generated negative risk-adjusted returns adding no value to investors with long positions. 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 Willdan and Ambipar Emergency

The main advantage of trading using opposite Willdan and Ambipar Emergency positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Willdan 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 Willdan Group 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 Commodity Directory module to find actively traded commodities issued by global exchanges.