Correlation Between Ambev SA and Air Products
Can any of the company-specific risk be diversified away by investing in both Ambev SA and Air Products 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 Ambev SA and Air Products into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ambev SA ADR and Air Products and, you can compare the effects of market volatilities on Ambev SA and Air Products 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 Ambev SA with a short position of Air Products. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ambev SA and Air Products.
Diversification Opportunities for Ambev SA and Air Products
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Ambev and Air is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Ambev SA ADR and Air Products and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Air Products and Ambev SA 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 Ambev SA ADR are associated (or correlated) with Air Products. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Air Products has no effect on the direction of Ambev SA i.e., Ambev SA and Air Products go up and down completely randomly.
Pair Corralation between Ambev SA and Air Products
Given the investment horizon of 90 days Ambev SA ADR is expected to under-perform the Air Products. But the stock apears to be less risky and, when comparing its historical volatility, Ambev SA ADR is 1.16 times less risky than Air Products. The stock trades about -0.06 of its potential returns per unit of risk. The Air Products and is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 25,514 in Air Products and on September 2, 2024 and sell it today you would earn a total of 7,919 from holding Air Products and or generate 31.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ambev SA ADR vs. Air Products and
Performance |
| Timeline |
| Ambev SA ADR |
| Air Products |
Ambev SA and Air Products Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ambev SA and Air Products
The main advantage of trading using opposite Ambev SA and Air Products positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ambev SA position performs unexpectedly, Air Products 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 Air Products will offset losses from the drop in Air Products' long position.| Ambev SA vs. Compania Cervecerias Unidas | Ambev SA vs. Molson Coors Brewing | Ambev SA vs. Suntory Beverage Food | Ambev SA vs. Carlsberg AS |
| Air Products vs. PPG Industries | Air Products vs. Sherwin Williams Co | Air Products vs. Ecolab Inc | Air Products vs. Albemarle Corp |
Check out your portfolio center.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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges |