Correlation Between Wilhelmina and Ambipar Emergency

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

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

Diversification Opportunities for Wilhelmina and Ambipar Emergency

-0.82

Correlation Coefficient

Wilhelmina  Ambipar Emergency

Pay attention - limited upside

The 3 months correlation between Wilhelmina and Ambipar is -0.82. Overlapping area represents the amount of risk that can be diversified away by holding Wilhelmina and Ambipar Emergency Response in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ambipar Emergency and Wilhelmina 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 Wilhelmina 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 Wilhelmina i.e., Wilhelmina and Ambipar Emergency go up and down completely randomly.

Pair Corralation between Wilhelmina and Ambipar Emergency

Given the investment horizon of 90 days Wilhelmina is expected to generate 0.52 times more return on investment than Ambipar Emergency. However, Wilhelmina is 1.91 times less risky than Ambipar Emergency. It trades about 0.29 of its potential returns per unit of risk. Ambipar Emergency Response is currently generating about -0.1 per unit of risk. If you would invest  335.00  in Wilhelmina on September 1, 2024 and sell it today you would earn a total of  62.00  from holding Wilhelmina or generate 18.51% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Wilhelmina  vs.  Ambipar Emergency Response

Wilhelmina

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Wilhelmina has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fragile performance in the last few months, the Stock's essential indicators remain very healthy which may send shares a bit higher in December 2024. The recent disarray may also be a sign of long period up-swing for the firm investors.

Ambipar Emergency

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Ambipar Emergency Response are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite fairly fragile fundamental drivers, Ambipar Emergency demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Wilhelmina and Ambipar Emergency

The main advantage of trading using opposite Wilhelmina and Ambipar Emergency positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wilhelmina 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 Wilhelmina 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.

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.