Correlation Between Ambev SA and NTG Nordic
Can any of the company-specific risk be diversified away by investing in both Ambev SA and NTG Nordic 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 NTG Nordic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ambev SA and NTG Nordic Transport, you can compare the effects of market volatilities on Ambev SA and NTG Nordic 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 NTG Nordic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ambev SA and NTG Nordic.
Diversification Opportunities for Ambev SA and NTG Nordic
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Ambev and NTG is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Ambev SA and NTG Nordic Transport in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NTG Nordic Transport 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 are associated (or correlated) with NTG Nordic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NTG Nordic Transport has no effect on the direction of Ambev SA i.e., Ambev SA and NTG Nordic go up and down completely randomly.
Pair Corralation between Ambev SA and NTG Nordic
Assuming the 90 days trading horizon Ambev SA is expected to generate 2.86 times more return on investment than NTG Nordic. However, Ambev SA is 2.86 times more volatile than NTG Nordic Transport. It trades about 0.01 of its potential returns per unit of risk. NTG Nordic Transport is currently generating about -0.6 per unit of risk. If you would invest 196.00 in Ambev SA on September 25, 2024 and sell it today you would earn a total of 0.00 from holding Ambev SA or generate 0.0% 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 vs. NTG Nordic Transport
Performance |
| Timeline |
| Ambev SA |
| NTG Nordic Transport |
Ambev SA and NTG Nordic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ambev SA and NTG Nordic
The main advantage of trading using opposite Ambev SA and NTG Nordic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ambev SA position performs unexpectedly, NTG Nordic 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 NTG Nordic will offset losses from the drop in NTG Nordic's long position.| Ambev SA vs. NTG Nordic Transport | Ambev SA vs. PT Global Mediacom | Ambev SA vs. Hollywood Bowl Group | Ambev SA vs. Prosiebensat 1 Media |
| NTG Nordic vs. Kuehne Nagel International | NTG Nordic vs. ZTO EXPRESS | NTG Nordic vs. NIKKON HOLDINGS TD | NTG Nordic vs. SENKO GROUP HOLDINGS |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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