Correlation Between Ambev SA and PennantPark Floating
Can any of the company-specific risk be diversified away by investing in both Ambev SA and PennantPark Floating 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 PennantPark Floating 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 PennantPark Floating Rate, you can compare the effects of market volatilities on Ambev SA and PennantPark Floating 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 PennantPark Floating. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ambev SA and PennantPark Floating.
Diversification Opportunities for Ambev SA and PennantPark Floating
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Ambev and PennantPark is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Ambev SA ADR and PennantPark Floating Rate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PennantPark Floating Rate 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 PennantPark Floating. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PennantPark Floating Rate has no effect on the direction of Ambev SA i.e., Ambev SA and PennantPark Floating go up and down completely randomly.
Pair Corralation between Ambev SA and PennantPark Floating
Given the investment horizon of 90 days Ambev SA ADR is expected to under-perform the PennantPark Floating. In addition to that, Ambev SA is 2.28 times more volatile than PennantPark Floating Rate. It trades about -0.16 of its total potential returns per unit of risk. PennantPark Floating Rate is currently generating about 0.02 per unit of volatility. If you would invest 1,105 in PennantPark Floating Rate on August 31, 2024 and sell it today you would earn a total of 2.00 from holding PennantPark Floating Rate or generate 0.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ambev SA ADR vs. PennantPark Floating Rate
Performance |
| Timeline |
| Ambev SA ADR |
| PennantPark Floating Rate |
Ambev SA and PennantPark Floating Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ambev SA and PennantPark Floating
The main advantage of trading using opposite Ambev SA and PennantPark Floating positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ambev SA position performs unexpectedly, PennantPark Floating 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 PennantPark Floating will offset losses from the drop in PennantPark Floating'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 |
| PennantPark Floating vs. Ares Capital | PennantPark Floating vs. Hercules Capital | PennantPark Floating vs. Main Street Capital |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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