Correlation Between Strategic Investments and Ambev SA
Can any of the company-specific risk be diversified away by investing in both Strategic Investments and Ambev SA 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 Strategic Investments and Ambev SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Strategic Investments AS and Ambev SA, you can compare the effects of market volatilities on Strategic Investments and Ambev SA 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 Strategic Investments with a short position of Ambev SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Strategic Investments and Ambev SA.
Diversification Opportunities for Strategic Investments and Ambev SA
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between Strategic and Ambev is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Strategic Investments AS and Ambev SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ambev SA and Strategic Investments 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 Strategic Investments AS are associated (or correlated) with Ambev SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ambev SA has no effect on the direction of Strategic Investments i.e., Strategic Investments and Ambev SA go up and down completely randomly.
Pair Corralation between Strategic Investments and Ambev SA
Assuming the 90 days horizon Strategic Investments AS is expected to generate 2.71 times more return on investment than Ambev SA. However, Strategic Investments is 2.71 times more volatile than Ambev SA. It trades about 0.04 of its potential returns per unit of risk. Ambev SA is currently generating about -0.01 per unit of risk. If you would invest 9.03 in Strategic Investments AS on September 23, 2024 and sell it today you would earn a total of 4.97 from holding Strategic Investments AS or generate 55.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Strategic Investments AS vs. Ambev SA
Performance |
| Timeline |
| Strategic Investments |
| Ambev SA |
Strategic Investments and Ambev SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Strategic Investments and Ambev SA
The main advantage of trading using opposite Strategic Investments and Ambev SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Strategic Investments position performs unexpectedly, Ambev SA 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 Ambev SA will offset losses from the drop in Ambev SA's long position.| Strategic Investments vs. Blackstone Group | Strategic Investments vs. The Bank of | Strategic Investments vs. Ameriprise Financial | Strategic Investments vs. State Street |
| Ambev SA vs. ECHO INVESTMENT ZY | Ambev SA vs. PT Ace Hardware | Ambev SA vs. Strategic Investments AS | Ambev SA vs. JLF INVESTMENT |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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