Correlation Between Ambev SA and Black Hawk
Can any of the company-specific risk be diversified away by investing in both Ambev SA and Black Hawk 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 Black Hawk 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 Black Hawk Acquisition, you can compare the effects of market volatilities on Ambev SA and Black Hawk 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 Black Hawk. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ambev SA and Black Hawk.
Diversification Opportunities for Ambev SA and Black Hawk
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Ambev and Black is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Ambev SA ADR and Black Hawk Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Black Hawk Acquisition 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 Black Hawk. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Black Hawk Acquisition has no effect on the direction of Ambev SA i.e., Ambev SA and Black Hawk go up and down completely randomly.
Pair Corralation between Ambev SA and Black Hawk
Given the investment horizon of 90 days Ambev SA ADR is expected to generate 13.64 times more return on investment than Black Hawk. However, Ambev SA is 13.64 times more volatile than Black Hawk Acquisition. It trades about 0.04 of its potential returns per unit of risk. Black Hawk Acquisition is currently generating about 0.1 per unit of risk. If you would invest 183.00 in Ambev SA ADR on November 3, 2024 and sell it today you would earn a total of 2.00 from holding Ambev SA ADR or generate 1.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ambev SA ADR vs. Black Hawk Acquisition
Performance |
| Timeline |
| Ambev SA ADR |
| Black Hawk Acquisition |
Ambev SA and Black Hawk Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ambev SA and Black Hawk
The main advantage of trading using opposite Ambev SA and Black Hawk positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ambev SA position performs unexpectedly, Black Hawk 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 Black Hawk will offset losses from the drop in Black Hawk's long position.| Ambev SA vs. Fomento Economico Mexicano | Ambev SA vs. Boston Beer | Ambev SA vs. Carlsberg AS | Ambev SA vs. Compania Cervecerias Unidas |
| Black Hawk vs. Omni Health | Black Hawk vs. Wingstop | Black Hawk vs. Cardinal Health | Black Hawk vs. Summit Hotel Properties |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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