Correlation Between Maiden Holdings and Ambev SA
Can any of the company-specific risk be diversified away by investing in both Maiden Holdings 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 Maiden Holdings and Ambev SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Maiden Holdings and Ambev SA ADR, you can compare the effects of market volatilities on Maiden Holdings 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 Maiden Holdings with a short position of Ambev SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Maiden Holdings and Ambev SA.
Diversification Opportunities for Maiden Holdings and Ambev SA
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Maiden and Ambev is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Maiden Holdings and Ambev SA ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ambev SA ADR and Maiden Holdings 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 Maiden Holdings 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 ADR has no effect on the direction of Maiden Holdings i.e., Maiden Holdings and Ambev SA go up and down completely randomly.
Pair Corralation between Maiden Holdings and Ambev SA
Given the investment horizon of 90 days Maiden Holdings is expected to generate 0.81 times more return on investment than Ambev SA. However, Maiden Holdings is 1.23 times less risky than Ambev SA. It trades about -0.06 of its potential returns per unit of risk. Ambev SA ADR is currently generating about -0.16 per unit of risk. If you would invest 1,738 in Maiden Holdings on August 31, 2024 and sell it today you would lose (31.00) from holding Maiden Holdings or give up 1.78% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Maiden Holdings vs. Ambev SA ADR
Performance |
| Timeline |
| Maiden Holdings |
| Ambev SA ADR |
Maiden Holdings and Ambev SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Maiden Holdings and Ambev SA
The main advantage of trading using opposite Maiden Holdings and Ambev SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Maiden Holdings 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.| Maiden Holdings vs. Maiden Holdings North | Maiden Holdings vs. Reinsurance Group of | Maiden Holdings vs. Entergy Arkansas LLC | Maiden Holdings vs. Entergy New Orleans |
| Ambev SA vs. Fomento Economico Mexicano | Ambev SA vs. Boston Beer | Ambev SA vs. Carlsberg AS | Ambev SA vs. Compania Cervecerias Unidas |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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