Correlation Between Ambev SA and Bowhead Specialty
Can any of the company-specific risk be diversified away by investing in both Ambev SA and Bowhead Specialty 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 Bowhead Specialty 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 Bowhead Specialty Holdings, you can compare the effects of market volatilities on Ambev SA and Bowhead Specialty 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 Bowhead Specialty. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ambev SA and Bowhead Specialty.
Diversification Opportunities for Ambev SA and Bowhead Specialty
-0.71 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Ambev and Bowhead is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Ambev SA ADR and Bowhead Specialty Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bowhead Specialty 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 Bowhead Specialty. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bowhead Specialty has no effect on the direction of Ambev SA i.e., Ambev SA and Bowhead Specialty go up and down completely randomly.
Pair Corralation between Ambev SA and Bowhead Specialty
Given the investment horizon of 90 days Ambev SA ADR is expected to under-perform the Bowhead Specialty. But the stock apears to be less risky and, when comparing its historical volatility, Ambev SA ADR is 1.4 times less risky than Bowhead Specialty. The stock trades about -0.03 of its potential returns per unit of risk. The Bowhead Specialty Holdings is currently generating about 0.49 of returns per unit of risk over similar time horizon. If you would invest 2,968 in Bowhead Specialty Holdings on September 4, 2024 and sell it today you would earn a total of 613.00 from holding Bowhead Specialty Holdings or generate 20.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ambev SA ADR vs. Bowhead Specialty Holdings
Performance |
| Timeline |
| Ambev SA ADR |
| Bowhead Specialty |
Ambev SA and Bowhead Specialty Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ambev SA and Bowhead Specialty
The main advantage of trading using opposite Ambev SA and Bowhead Specialty positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ambev SA position performs unexpectedly, Bowhead Specialty 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 Bowhead Specialty will offset losses from the drop in Bowhead Specialty'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 |
| Bowhead Specialty vs. Progressive Corp | Bowhead Specialty vs. Cincinnati Financial | Bowhead Specialty vs. W R Berkley | Bowhead Specialty vs. The Allstate |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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