Correlation Between Ambev SA and Marine Products
Can any of the company-specific risk be diversified away by investing in both Ambev SA and Marine 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 Marine 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 Marine Products, you can compare the effects of market volatilities on Ambev SA and Marine 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 Marine Products. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ambev SA and Marine Products.
Diversification Opportunities for Ambev SA and Marine Products
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Ambev and Marine is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Ambev SA ADR and Marine Products in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Marine 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 Marine Products. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Marine Products has no effect on the direction of Ambev SA i.e., Ambev SA and Marine Products go up and down completely randomly.
Pair Corralation between Ambev SA and Marine Products
Given the investment horizon of 90 days Ambev SA ADR is expected to generate 1.23 times more return on investment than Marine Products. However, Ambev SA is 1.23 times more volatile than Marine Products. It trades about 0.05 of its potential returns per unit of risk. Marine Products is currently generating about -0.02 per unit of risk. If you would invest 183.00 in Ambev SA ADR on November 2, 2024 and sell it today you would earn a total of 3.00 from holding Ambev SA ADR or generate 1.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ambev SA ADR vs. Marine Products
Performance |
| Timeline |
| Ambev SA ADR |
| Marine Products |
Ambev SA and Marine Products Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ambev SA and Marine Products
The main advantage of trading using opposite Ambev SA and Marine Products positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ambev SA position performs unexpectedly, Marine 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 Marine Products will offset losses from the drop in Marine Products' long position.| Ambev SA vs. Fomento Economico Mexicano | Ambev SA vs. Boston Beer | Ambev SA vs. Carlsberg AS | Ambev SA vs. Compania Cervecerias Unidas |
| Marine Products vs. Thor Industries | Marine Products vs. BRP Inc | Marine Products vs. Brunswick | Marine Products vs. EZGO Technologies |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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