Correlation Between Stagwell and Ambev SA
Can any of the company-specific risk be diversified away by investing in both Stagwell 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 Stagwell and Ambev SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Stagwell and Ambev SA ADR, you can compare the effects of market volatilities on Stagwell 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 Stagwell with a short position of Ambev SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stagwell and Ambev SA.
Diversification Opportunities for Stagwell and Ambev SA
Good diversification
The 3 months correlation between Stagwell and Ambev is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Stagwell 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 Stagwell 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 Stagwell 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 Stagwell i.e., Stagwell and Ambev SA go up and down completely randomly.
Pair Corralation between Stagwell and Ambev SA
Given the investment horizon of 90 days Stagwell is expected to generate 1.75 times more return on investment than Ambev SA. However, Stagwell is 1.75 times more volatile than Ambev SA ADR. It trades about 0.41 of its potential returns per unit of risk. Ambev SA ADR is currently generating about -0.11 per unit of risk. If you would invest 635.00 in Stagwell on August 30, 2024 and sell it today you would earn a total of 174.00 from holding Stagwell or generate 27.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Stagwell vs. Ambev SA ADR
Performance |
| Timeline |
| Stagwell |
| Ambev SA ADR |
Stagwell and Ambev SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Stagwell and Ambev SA
The main advantage of trading using opposite Stagwell and Ambev SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stagwell 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.| Stagwell vs. Innovid Corp | Stagwell vs. Interpublic Group of | Stagwell vs. Cimpress NV | Stagwell vs. Criteo Sa |
| 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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