Correlation Between Ambac Financial and Cencora

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

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

Diversification Opportunities for Ambac Financial and Cencora

-0.12

Correlation Coefficient

Ambac Financial  Cencora

Good diversification

The 3 months correlation between Ambac and Cencora is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Ambac Financial Group and Cencora in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cencora and Ambac Financial 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 Ambac Financial Group are associated (or correlated) with Cencora. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cencora has no effect on the direction of Ambac Financial i.e., Ambac Financial and Cencora go up and down completely randomly.

Pair Corralation between Ambac Financial and Cencora

Given the investment horizon of 90 days Ambac Financial Group is expected to generate 3.55 times more return on investment than Cencora. However, Ambac Financial is 3.55 times more volatile than Cencora. It trades about 0.03 of its potential returns per unit of risk. Cencora is currently generating about -0.03 per unit of risk. If you would invest  810.00  in Ambac Financial Group on May 7, 2025 and sell it today you would earn a total of  17.00  from holding Ambac Financial Group or generate 2.1% return on investment over 90 days.

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

Ambac Financial Group  vs.  Cencora

Ambac Financial Group

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Ambac Financial Group are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of rather unfluctuating fundamental drivers, Ambac Financial may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Cencora

Risk-Adjusted Performance

Very Weak

Over the last 90 days Cencora has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Cencora is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Ambac Financial and Cencora

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

The idea behind Ambac Financial Group and Cencora 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.