Correlation Between Ambev SA and MYR
Can any of the company-specific risk be diversified away by investing in both Ambev SA and MYR 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 MYR 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 MYR Group, you can compare the effects of market volatilities on Ambev SA and MYR 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 MYR. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ambev SA and MYR.
Diversification Opportunities for Ambev SA and MYR
Pay attention - limited upside
The 3 months correlation between Ambev and MYR is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding Ambev SA ADR and MYR Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MYR Group 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 MYR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MYR Group has no effect on the direction of Ambev SA i.e., Ambev SA and MYR go up and down completely randomly.
Pair Corralation between Ambev SA and MYR
Given the investment horizon of 90 days Ambev SA ADR is expected to under-perform the MYR. But the stock apears to be less risky and, when comparing its historical volatility, Ambev SA ADR is 1.68 times less risky than MYR. The stock trades about -0.03 of its potential returns per unit of risk. The MYR Group is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 13,261 in MYR Group on August 27, 2024 and sell it today you would earn a total of 1,844 from holding MYR Group or generate 13.91% 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. MYR Group
Performance |
| Timeline |
| Ambev SA ADR |
| MYR Group |
Ambev SA and MYR Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ambev SA and MYR
The main advantage of trading using opposite Ambev SA and MYR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ambev SA position performs unexpectedly, MYR 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 MYR will offset losses from the drop in MYR'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 |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
Other Complementary Tools
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Transaction History View history of all your transactions and understand their impact on performance |