Correlation Between Ams AG and Codan

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

By analyzing existing cross correlation between ams AG and Codan Limited, you can compare the effects of market volatilities on Ams AG and Codan 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 Ams AG with a short position of Codan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ams AG and Codan.

Diversification Opportunities for Ams AG and Codan

0.45

Correlation Coefficient

Ams AG  Codan

Very weak diversification

The 3 months correlation between Ams and Codan is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding ams AG and Codan Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Codan Limited and Ams AG 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 ams AG are associated (or correlated) with Codan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Codan Limited has no effect on the direction of Ams AG i.e., Ams AG and Codan go up and down completely randomly.

Pair Corralation between Ams AG and Codan

Assuming the 90 days horizon ams AG is expected to under-perform the Codan. But the pink sheet apears to be less risky and, when comparing its historical volatility, ams AG is 1.27 times less risky than Codan. The pink sheet trades about -0.34 of its potential returns per unit of risk. The Codan Limited is currently generating about 0.31 of returns per unit of risk over similar time horizon. If you would invest  1,907  in Codan Limited on August 11, 2025 and sell it today you would earn a total of  467.00  from holding Codan Limited or generate 24.49% return on investment over 90 days.

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

ams AG  vs.  Codan Limited

ams AG

Risk-Adjusted Performance

Weakest

Over the last 90 days ams AG has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, Ams AG is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Codan Limited

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Codan Limited are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak basic indicators, Codan reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Ams AG and Codan

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

The idea behind ams AG and Codan Limited 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.