Correlation Between Ambev SA and MBGGR

Can any of the company-specific risk be diversified away by investing in both Ambev SA and MBGGR 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 MBGGR 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 MBGGR 35 03 AUG 25, you can compare the effects of market volatilities on Ambev SA and MBGGR 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 MBGGR. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ambev SA and MBGGR.

Diversification Opportunities for Ambev SA and MBGGR

-0.55

Correlation Coefficient

Ambev SA  MBGGR

Excellent diversification

The 3 months correlation between Ambev and MBGGR is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Ambev SA ADR and MBGGR 35 03 AUG 25 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MBGGR 35 03 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 MBGGR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MBGGR 35 03 has no effect on the direction of Ambev SA i.e., Ambev SA and MBGGR go up and down completely randomly.

Pair Corralation between Ambev SA and MBGGR

Given the investment horizon of 90 days Ambev SA ADR is expected to under-perform the MBGGR. In addition to that, Ambev SA is 5.6 times more volatile than MBGGR 35 03 AUG 25. It trades about -0.06 of its total potential returns per unit of risk. MBGGR 35 03 AUG 25 is currently generating about -0.01 per unit of volatility. If you would invest  9,700  in MBGGR 35 03 AUG 25 on October 4, 2024 and sell it today you would lose (22.00) from holding MBGGR 35 03 AUG 25 or give up 0.23% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	29.22%
Values	Daily Returns

Ambev SA ADR  vs.  MBGGR 35 03 AUG 25

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.

MBGGR 35 03

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days MBGGR 35 03 AUG 25 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unfluctuating performance, the Bond's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for MBGGR 35 03 AUG 25 investors.

Pair Trading with Ambev SA and MBGGR

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

The idea behind Ambev SA ADR and MBGGR 35 03 AUG 25 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 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.