Correlation Between Cencora and Ambac Financial

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

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

Diversification Opportunities for Cencora and Ambac Financial

-0.12

Correlation Coefficient

Cencora  Ambac Financial

Good diversification

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

Pair Corralation between Cencora and Ambac Financial

Considering the 90-day investment horizon Cencora is expected to generate 10.42 times less return on investment than Ambac Financial. But when comparing it to its historical volatility, Cencora is 3.28 times less risky than Ambac Financial. It trades about 0.01 of its potential returns per unit of risk. Ambac Financial Group is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  811.00  in Ambac Financial Group on May 6, 2025 and sell it today you would earn a total of  23.00  from holding Ambac Financial Group or generate 2.84% return on investment over 90 days.

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

Cencora  vs.  Ambac Financial Group

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.

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.

Pair Trading with Cencora and Ambac Financial

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

The idea behind Cencora and Ambac Financial Group 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .