Correlation Between Ambrus Core and Science Technology

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

By analyzing existing cross correlation between Ambrus Core Bond and Science Technology Fund, you can compare the effects of market volatilities on Ambrus Core and Science Technology 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 Ambrus Core with a short position of Science Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ambrus Core and Science Technology.

Diversification Opportunities for Ambrus Core and Science Technology

0.7

Correlation Coefficient

Ambrus Core  Science Technology

Poor diversification

The 3 months correlation between Ambrus and Science is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Ambrus Core Bond and Science Technology Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Science Technology and Ambrus Core 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 Ambrus Core Bond are associated (or correlated) with Science Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Science Technology has no effect on the direction of Ambrus Core i.e., Ambrus Core and Science Technology go up and down completely randomly.

Pair Corralation between Ambrus Core and Science Technology

Assuming the 90 days horizon Ambrus Core is expected to generate 8.96 times less return on investment than Science Technology. But when comparing it to its historical volatility, Ambrus Core Bond is 5.57 times less risky than Science Technology. It trades about 0.2 of its potential returns per unit of risk. Science Technology Fund is currently generating about 0.33 of returns per unit of risk over similar time horizon. If you would invest  3,076  in Science Technology Fund on May 3, 2025 and sell it today you would earn a total of  667.00  from holding Science Technology Fund or generate 21.68% return on investment over 90 days.

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

Ambrus Core Bond  vs.  Science Technology Fund

Ambrus Core Bond

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Ambrus Core Bond are ranked lower than 16 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong fundamental drivers, Ambrus Core is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Science Technology

Risk-Adjusted Performance

Solid

Over the last 90 days Science Technology Fund has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly weak basic indicators, Science Technology showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Ambrus Core and Science Technology

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

The idea behind Ambrus Core Bond and Science Technology Fund 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.