Correlation Between Ambu AS and Vestas Wind

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

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

Diversification Opportunities for Ambu AS and Vestas Wind

-0.02

Correlation Coefficient

Ambu AS  Vestas Wind

Good diversification

The 3 months correlation between Ambu and Vestas is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Ambu AS and Vestas Wind Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vestas Wind Systems and Ambu AS 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 Ambu AS are associated (or correlated) with Vestas Wind. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vestas Wind Systems has no effect on the direction of Ambu AS i.e., Ambu AS and Vestas Wind go up and down completely randomly.

Pair Corralation between Ambu AS and Vestas Wind

Assuming the 90 days trading horizon Ambu AS is expected to generate 0.94 times more return on investment than Vestas Wind. However, Ambu AS is 1.06 times less risky than Vestas Wind. It trades about 0.01 of its potential returns per unit of risk. Vestas Wind Systems is currently generating about -0.03 per unit of risk. If you would invest  10,619  in Ambu AS on March 4, 2025 and sell it today you would lose (489.00) from holding Ambu AS or give up 4.6% of portfolio value over 90 days.

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

Ambu AS  vs.  Vestas Wind Systems

Ambu AS

Risk-Adjusted Performance

Very Weak

Over the last 90 days Ambu AS has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unfluctuating performance in the last few months, the Stock's fundamental drivers remain somewhat strong which may send shares a bit higher in July 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Vestas Wind Systems

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Vestas Wind Systems are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of very weak basic indicators, Vestas Wind may actually be approaching a critical reversion point that can send shares even higher in July 2025.

Pair Trading with Ambu AS and Vestas Wind

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

The idea behind Ambu AS and Vestas Wind Systems 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.