Correlation Between Ambase Corp and Wharf Real

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

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

Diversification Opportunities for Ambase Corp and Wharf Real

0.29

Correlation Coefficient

Ambase Corp  Wharf Real

Modest diversification

The 3 months correlation between Ambase and Wharf is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Ambase Corp and Wharf Real Estate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wharf Real Estate 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 Wharf Real. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wharf Real Estate has no effect on the direction of Ambase Corp i.e., Ambase Corp and Wharf Real go up and down completely randomly.

Pair Corralation between Ambase Corp and Wharf Real

Given the investment horizon of 90 days Ambase Corp is expected to generate 0.65 times more return on investment than Wharf Real. However, Ambase Corp is 1.54 times less risky than Wharf Real. It trades about 0.01 of its potential returns per unit of risk. Wharf Real Estate is currently generating about -0.15 per unit of risk. 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 Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Ambase Corp  vs.  Wharf Real Estate

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.

Wharf Real Estate

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Wharf Real Estate has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Wharf Real is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Ambase Corp and Wharf Real

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

The idea behind Ambase Corp and Wharf Real Estate 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.

Check out your portfolio center.

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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.