Correlation Between Bridgemarq Real and Ambase Corp

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

By analyzing existing cross correlation between Bridgemarq Real Estate and Ambase Corp, you can compare the effects of market volatilities on Bridgemarq Real and Ambase Corp 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 Bridgemarq Real with a short position of Ambase Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bridgemarq Real and Ambase Corp.

Diversification Opportunities for Bridgemarq Real and Ambase Corp

-0.03

Correlation Coefficient

Bridgemarq Real  Ambase Corp

Good diversification

The 3 months correlation between Bridgemarq and Ambase is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Bridgemarq Real Estate and Ambase Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ambase Corp and Bridgemarq Real 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 Bridgemarq Real Estate are associated (or correlated) with Ambase Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ambase Corp has no effect on the direction of Bridgemarq Real i.e., Bridgemarq Real and Ambase Corp go up and down completely randomly.

Pair Corralation between Bridgemarq Real and Ambase Corp

Assuming the 90 days horizon Bridgemarq Real Estate is expected to generate 0.23 times more return on investment than Ambase Corp. However, Bridgemarq Real Estate is 4.29 times less risky than Ambase Corp. It trades about 0.35 of its potential returns per unit of risk. Ambase Corp is currently generating about 0.03 per unit of risk. If you would invest  886.00  in Bridgemarq Real Estate on August 2, 2024 and sell it today you would earn a total of  198.00  from holding Bridgemarq Real Estate or generate 22.35% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	95.24%
Values	Daily Returns

Bridgemarq Real Estate  vs.  Ambase Corp

Bridgemarq Real Estate

Risk-Adjusted Performance

27 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Bridgemarq Real Estate are ranked lower than 27 (%) of all global equities and portfolios over the last 90 days. Despite nearly abnormal basic indicators, Bridgemarq Real reported solid returns over the last few months and may actually be approaching a breakup point.

Ambase Corp

Risk-Adjusted Performance

2 of 100

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Ambase Corp are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Even with relatively fragile fundamental indicators, Ambase Corp may actually be approaching a critical reversion point that can send shares even higher in December 2024.

Pair Trading with Bridgemarq Real and Ambase Corp

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

The idea behind Bridgemarq Real Estate and Ambase Corp 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.