Correlation Between Ambev SA and Jutal Offshore
Can any of the company-specific risk be diversified away by investing in both Ambev SA and Jutal Offshore 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 Jutal Offshore 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 Jutal Offshore Oil, you can compare the effects of market volatilities on Ambev SA and Jutal Offshore 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 Jutal Offshore. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ambev SA and Jutal Offshore.
Diversification Opportunities for Ambev SA and Jutal Offshore
-0.24 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Ambev and Jutal is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Ambev SA ADR and Jutal Offshore Oil in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jutal Offshore Oil 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 Jutal Offshore. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jutal Offshore Oil has no effect on the direction of Ambev SA i.e., Ambev SA and Jutal Offshore go up and down completely randomly.
Pair Corralation between Ambev SA and Jutal Offshore
Given the investment horizon of 90 days Ambev SA ADR is expected to generate 34.25 times more return on investment than Jutal Offshore. However, Ambev SA is 34.25 times more volatile than Jutal Offshore Oil. It trades about 0.14 of its potential returns per unit of risk. Jutal Offshore Oil is currently generating about -0.22 per unit of risk. If you would invest 220.00 in Ambev SA ADR on September 12, 2024 and sell it today you would earn a total of 12.00 from holding Ambev SA ADR or generate 5.45% 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. Jutal Offshore Oil
Performance |
| Timeline |
| Ambev SA ADR |
| Jutal Offshore Oil |
Ambev SA and Jutal Offshore Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ambev SA and Jutal Offshore
The main advantage of trading using opposite Ambev SA and Jutal Offshore positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ambev SA position performs unexpectedly, Jutal Offshore 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 Jutal Offshore will offset losses from the drop in Jutal Offshore's long position.| Ambev SA vs. Fomento Economico Mexicano | Ambev SA vs. Boston Beer | Ambev SA vs. Carlsberg AS | Ambev SA vs. Molson Coors Beverage |
| Jutal Offshore vs. Diageo PLC ADR | Jutal Offshore vs. Anheuser Busch Inbev | Jutal Offshore vs. Digi International | Jutal Offshore vs. Ambev SA ADR |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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