Correlation Between Alfa Holdings and Ambipar Participaes
Can any of the company-specific risk be diversified away by investing in both Alfa Holdings and Ambipar Participaes 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 Alfa Holdings and Ambipar Participaes into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alfa Holdings SA and Ambipar Participaes e, you can compare the effects of market volatilities on Alfa Holdings and Ambipar Participaes 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 Alfa Holdings with a short position of Ambipar Participaes. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alfa Holdings and Ambipar Participaes.
Diversification Opportunities for Alfa Holdings and Ambipar Participaes
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Alfa and Ambipar is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Alfa Holdings SA and Ambipar Participaes e in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ambipar Participaes and Alfa 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 Alfa Holdings SA are associated (or correlated) with Ambipar Participaes. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ambipar Participaes has no effect on the direction of Alfa Holdings i.e., Alfa Holdings and Ambipar Participaes go up and down completely randomly.
Pair Corralation between Alfa Holdings and Ambipar Participaes
Assuming the 90 days trading horizon Alfa Holdings SA is expected to under-perform the Ambipar Participaes. But the stock apears to be less risky and, when comparing its historical volatility, Alfa Holdings SA is 1.25 times less risky than Ambipar Participaes. The stock trades about -0.32 of its potential returns per unit of risk. The Ambipar Participaes e is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest 13,240 in Ambipar Participaes e on August 29, 2024 and sell it today you would earn a total of 3,259 from holding Ambipar Participaes e or generate 24.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Alfa Holdings SA vs. Ambipar Participaes e
Performance |
| Timeline |
| Alfa Holdings SA |
| Ambipar Participaes |
Alfa Holdings and Ambipar Participaes Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alfa Holdings and Ambipar Participaes
The main advantage of trading using opposite Alfa Holdings and Ambipar Participaes positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alfa Holdings position performs unexpectedly, Ambipar Participaes 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 Ambipar Participaes will offset losses from the drop in Ambipar Participaes' long position.| Alfa Holdings vs. Ambipar Participaes e | Alfa Holdings vs. Movida Participaes SA | Alfa Holdings vs. Banco BTG Pactual | Alfa Holdings vs. BTG Pactual Logstica |
| Ambipar Participaes vs. SIMPAR SA | Ambipar Participaes vs. Pet Center Comrcio | Ambipar Participaes vs. Movida Participaes SA |
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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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