Correlation Between Ares Acquisition and Ambase Corp

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

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

Diversification Opportunities for Ares Acquisition and Ambase Corp

-0.89

Correlation Coefficient

Ares Acquisition  Ambase Corp

Pay attention - limited upside

The 3 months correlation between Ares and Ambase is -0.89. Overlapping area represents the amount of risk that can be diversified away by holding Ares Acquisition and Ambase Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ambase Corp and Ares Acquisition 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 Ares Acquisition are associated (or correlated) with Ambase Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ambase Corp has no effect on the direction of Ares Acquisition i.e., Ares Acquisition and Ambase Corp go up and down completely randomly.

Pair Corralation between Ares Acquisition and Ambase Corp

If you would invest  34.00  in Ambase Corp on September 13, 2024 and sell it today you would earn a total of  0.00  from holding Ambase Corp or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	4.76%
Values	Daily Returns

Ares Acquisition  vs.  Ambase Corp

Ares Acquisition

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ares Acquisition has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, Ares Acquisition is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Ambase Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ambase Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Even with fragile performance in the last few months, the Stock's fundamental indicators remain relatively invariable which may send shares a bit higher in January 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pair Trading with Ares Acquisition and Ambase Corp

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

The idea behind Ares Acquisition and Ambase Corp 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.