Correlation Between Ambev SA and Saia
Can any of the company-specific risk be diversified away by investing in both Ambev SA and Saia 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 Saia 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 Saia Inc, you can compare the effects of market volatilities on Ambev SA and Saia 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 Saia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ambev SA and Saia.
Diversification Opportunities for Ambev SA and Saia
Excellent diversification
The 3 months correlation between Ambev and Saia is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Ambev SA ADR and Saia Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Saia Inc 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 Saia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Saia Inc has no effect on the direction of Ambev SA i.e., Ambev SA and Saia go up and down completely randomly.
Pair Corralation between Ambev SA and Saia
Given the investment horizon of 90 days Ambev SA is expected to generate 637.0 times less return on investment than Saia. But when comparing it to its historical volatility, Ambev SA ADR is 2.26 times less risky than Saia. It trades about 0.0 of its potential returns per unit of risk. Saia Inc is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 40,948 in Saia Inc on August 29, 2024 and sell it today you would earn a total of 15,648 from holding Saia Inc or generate 38.21% 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. Saia Inc
Performance |
| Timeline |
| Ambev SA ADR |
| Saia Inc |
Ambev SA and Saia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ambev SA and Saia
The main advantage of trading using opposite Ambev SA and Saia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ambev SA position performs unexpectedly, Saia 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 Saia will offset losses from the drop in Saia's long position.| Ambev SA vs. Budweiser Brewing | Ambev SA vs. Anheuser Busch InBev SANV | Ambev SA vs. Fomento Economico Mexicano | Ambev SA vs. Anheuser Busch Inbev |
| Saia vs. Knight Transportation | Saia vs. Universal Logistics Holdings | Saia vs. Heartland Express | Saia vs. Schneider National |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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