Correlation Between Ambev SA and InfuSystems Holdings
Can any of the company-specific risk be diversified away by investing in both Ambev SA and InfuSystems Holdings 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 InfuSystems Holdings 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 InfuSystems Holdings, you can compare the effects of market volatilities on Ambev SA and InfuSystems Holdings 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 InfuSystems Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ambev SA and InfuSystems Holdings.
Diversification Opportunities for Ambev SA and InfuSystems Holdings
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between Ambev and InfuSystems is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Ambev SA ADR and InfuSystems Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on InfuSystems Holdings 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 InfuSystems Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of InfuSystems Holdings has no effect on the direction of Ambev SA i.e., Ambev SA and InfuSystems Holdings go up and down completely randomly.
Pair Corralation between Ambev SA and InfuSystems Holdings
Given the investment horizon of 90 days Ambev SA ADR is expected to under-perform the InfuSystems Holdings. But the stock apears to be less risky and, when comparing its historical volatility, Ambev SA ADR is 1.53 times less risky than InfuSystems Holdings. The stock trades about -0.26 of its potential returns per unit of risk. The InfuSystems Holdings is currently generating about -0.07 of returns per unit of risk over similar time horizon. If you would invest 831.00 in InfuSystems Holdings on October 21, 2024 and sell it today you would lose (33.00) from holding InfuSystems Holdings or give up 3.97% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ambev SA ADR vs. InfuSystems Holdings
Performance |
| Timeline |
| Ambev SA ADR |
| InfuSystems Holdings |
Ambev SA and InfuSystems Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ambev SA and InfuSystems Holdings
The main advantage of trading using opposite Ambev SA and InfuSystems Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ambev SA position performs unexpectedly, InfuSystems Holdings 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 InfuSystems Holdings will offset losses from the drop in InfuSystems Holdings' long position.| Ambev SA vs. Fomento Economico Mexicano | Ambev SA vs. Boston Beer | Ambev SA vs. Carlsberg AS | Ambev SA vs. Compania Cervecerias Unidas |
| InfuSystems Holdings vs. Electromed | InfuSystems Holdings vs. Issuer Direct Corp | InfuSystems Holdings vs. IRIDEX | InfuSystems Holdings vs. Milestone Scientific |
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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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