Correlation Between Ambev SA and Viemed Healthcare
Can any of the company-specific risk be diversified away by investing in both Ambev SA and Viemed Healthcare 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 Viemed Healthcare 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 Viemed Healthcare, you can compare the effects of market volatilities on Ambev SA and Viemed Healthcare 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 Viemed Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ambev SA and Viemed Healthcare.
Diversification Opportunities for Ambev SA and Viemed Healthcare
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Ambev and Viemed is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Ambev SA ADR and Viemed Healthcare in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Viemed Healthcare 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 Viemed Healthcare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Viemed Healthcare has no effect on the direction of Ambev SA i.e., Ambev SA and Viemed Healthcare go up and down completely randomly.
Pair Corralation between Ambev SA and Viemed Healthcare
Given the investment horizon of 90 days Ambev SA ADR is expected to under-perform the Viemed Healthcare. But the stock apears to be less risky and, when comparing its historical volatility, Ambev SA ADR is 1.62 times less risky than Viemed Healthcare. The stock trades about -0.1 of its potential returns per unit of risk. The Viemed Healthcare is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 855.00 in Viemed Healthcare on September 1, 2024 and sell it today you would earn a total of 12.00 from holding Viemed Healthcare or generate 1.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ambev SA ADR vs. Viemed Healthcare
Performance |
| Timeline |
| Ambev SA ADR |
| Viemed Healthcare |
Ambev SA and Viemed Healthcare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ambev SA and Viemed Healthcare
The main advantage of trading using opposite Ambev SA and Viemed Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ambev SA position performs unexpectedly, Viemed Healthcare 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 Viemed Healthcare will offset losses from the drop in Viemed Healthcare'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 |
| Viemed Healthcare vs. Profound Medical Corp | Viemed Healthcare vs. Si Bone | Viemed Healthcare vs. Nevro Corp | Viemed Healthcare vs. Paragon 28 |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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