Correlation Between Ambase Corp and Metrospaces

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

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

Diversification Opportunities for Ambase Corp and Metrospaces

0.13

Correlation Coefficient

Ambase Corp  Metrospaces

Average diversification

The 3 months correlation between Ambase and Metrospaces is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Ambase Corp and Metrospaces in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Metrospaces and Ambase Corp 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 Ambase Corp are associated (or correlated) with Metrospaces. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Metrospaces has no effect on the direction of Ambase Corp i.e., Ambase Corp and Metrospaces go up and down completely randomly.

Pair Corralation between Ambase Corp and Metrospaces

Given the investment horizon of 90 days Ambase Corp is expected to under-perform the Metrospaces. But the pink sheet apears to be less risky and, when comparing its historical volatility, Ambase Corp is 37.09 times less risky than Metrospaces. The pink sheet trades about -0.09 of its potential returns per unit of risk. The Metrospaces is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  0.01  in Metrospaces on September 12, 2024 and sell it today you would earn a total of  0.00  from holding Metrospaces or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	98.44%
Values	Daily Returns

Ambase Corp  vs.  Metrospaces

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 inconsistent 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.

Metrospaces

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Metrospaces are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak basic indicators, Metrospaces exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Ambase Corp and Metrospaces

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

The idea behind Ambase Corp and Metrospaces 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.