Correlation Between Ambev SA and LOWES
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By analyzing existing cross correlation between Ambev SA ADR and LOWES PANIES INC, you can compare the effects of market volatilities on Ambev SA and LOWES 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 LOWES. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ambev SA and LOWES.
Diversification Opportunities for Ambev SA and LOWES
Modest diversification
The 3 months correlation between Ambev and LOWES is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Ambev SA ADR and LOWES PANIES INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LOWES PANIES 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 LOWES. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LOWES PANIES INC has no effect on the direction of Ambev SA i.e., Ambev SA and LOWES go up and down completely randomly.
Pair Corralation between Ambev SA and LOWES
Given the investment horizon of 90 days Ambev SA ADR is expected to generate 7.08 times more return on investment than LOWES. However, Ambev SA is 7.08 times more volatile than LOWES PANIES INC. It trades about -0.02 of its potential returns per unit of risk. LOWES PANIES INC is currently generating about -0.22 per unit of risk. If you would invest 222.00 in Ambev SA ADR on September 13, 2024 and sell it today you would lose (4.00) from holding Ambev SA ADR or give up 1.8% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Ambev SA ADR vs. LOWES PANIES INC
Performance |
| Timeline |
| Ambev SA ADR |
| LOWES PANIES INC |
Ambev SA and LOWES Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ambev SA and LOWES
The main advantage of trading using opposite Ambev SA and LOWES positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ambev SA position performs unexpectedly, LOWES 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 LOWES will offset losses from the drop in LOWES'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 |
| LOWES vs. Hudson Technologies | LOWES vs. Forsys Metals Corp | LOWES vs. Codexis | LOWES vs. Flexible Solutions International |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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