Correlation Between Ambev SA and FitLife Brands,

Can any of the company-specific risk be diversified away by investing in both Ambev SA and FitLife Brands, 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 FitLife Brands, into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Ambev SA ADR and FitLife Brands, Common, you can compare the effects of market volatilities on Ambev SA and FitLife Brands, 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 FitLife Brands,. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ambev SA and FitLife Brands,.

Diversification Opportunities for Ambev SA and FitLife Brands,

0.05

Correlation Coefficient

Ambev SA  FitLife Brands,

Significant diversification

The 3 months correlation between Ambev and FitLife is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Ambev SA ADR and FitLife Brands, Common in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FitLife Brands, Common 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 ADR are associated (or correlated) with FitLife Brands,. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FitLife Brands, Common has no effect on the direction of Ambev SA i.e., Ambev SA and FitLife Brands, go up and down completely randomly.

Pair Corralation between Ambev SA and FitLife Brands,

Given the investment horizon of 90 days Ambev SA ADR is expected to under-perform the FitLife Brands,. But the stock apears to be less risky and, when comparing its historical volatility, Ambev SA ADR is 1.06 times less risky than FitLife Brands,. The stock trades about -0.41 of its potential returns per unit of risk. The FitLife Brands, Common is currently generating about -0.16 of returns per unit of risk over similar time horizon. If you would invest  3,234  in FitLife Brands, Common on October 11, 2024 and sell it today you would lose (233.00) from holding FitLife Brands, Common or give up 7.2% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Ambev SA ADR  vs.  FitLife Brands, Common

Ambev SA ADR

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ambev SA ADR has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's technical and fundamental indicators remain fairly stable which may send shares a bit higher in February 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

FitLife Brands, Common

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days FitLife Brands, Common has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable essential indicators, FitLife Brands, is not utilizing all of its potentials. The recent stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Ambev SA and FitLife Brands,

The main advantage of trading using opposite Ambev SA and FitLife Brands, positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ambev SA position performs unexpectedly, FitLife Brands, 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 FitLife Brands, will offset losses from the drop in FitLife Brands,'s long position.

The idea behind Ambev SA ADR and FitLife Brands, Common pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.