Correlation Between Equinix and Ambari Brands
Can any of the company-specific risk be diversified away by investing in both Equinix and Ambari Brands 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 Equinix and Ambari Brands into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Equinix and Ambari Brands, you can compare the effects of market volatilities on Equinix and Ambari Brands 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 Equinix with a short position of Ambari Brands. Check out your portfolio center. Please also check ongoing floating volatility patterns of Equinix and Ambari Brands.
Diversification Opportunities for Equinix and Ambari Brands
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Equinix and Ambari is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Equinix and Ambari Brands in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ambari Brands and Equinix 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 Equinix are associated (or correlated) with Ambari Brands. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ambari Brands has no effect on the direction of Equinix i.e., Equinix and Ambari Brands go up and down completely randomly.
Pair Corralation between Equinix and Ambari Brands
Given the investment horizon of 90 days Equinix is expected to generate 0.07 times more return on investment than Ambari Brands. However, Equinix is 14.28 times less risky than Ambari Brands. It trades about 0.15 of its potential returns per unit of risk. Ambari Brands is currently generating about -0.01 per unit of risk. If you would invest 87,243 in Equinix on September 16, 2024 and sell it today you would earn a total of 9,257 from holding Equinix or generate 10.61% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 47.69% |
Values | Daily Returns |
Equinix vs. Ambari Brands
Performance |
Timeline |
Equinix |
Ambari Brands |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Equinix and Ambari Brands Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Equinix and Ambari Brands
The main advantage of trading using opposite Equinix and Ambari Brands positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Equinix position performs unexpectedly, Ambari Brands 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 Ambari Brands will offset losses from the drop in Ambari Brands' long position.Equinix vs. Crown Castle | Equinix vs. American Tower Corp | Equinix vs. Iron Mountain Incorporated | Equinix vs. Hannon Armstrong Sustainable |
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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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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