Correlation Between Camil Alimentos and Ambev SA

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

By analyzing existing cross correlation between Camil Alimentos SA and Ambev SA, you can compare the effects of market volatilities on Camil Alimentos 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 Camil Alimentos with a short position of Ambev SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Camil Alimentos and Ambev SA.

Diversification Opportunities for Camil Alimentos and Ambev SA

0.42

Correlation Coefficient

Camil Alimentos  Ambev SA

Very weak diversification

The 3 months correlation between Camil and Ambev is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Camil Alimentos SA and Ambev SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ambev SA and Camil Alimentos 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 Camil Alimentos SA 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 has no effect on the direction of Camil Alimentos i.e., Camil Alimentos and Ambev SA go up and down completely randomly.

Pair Corralation between Camil Alimentos and Ambev SA

Assuming the 90 days trading horizon Camil Alimentos SA is expected to under-perform the Ambev SA. In addition to that, Camil Alimentos is 1.54 times more volatile than Ambev SA. It trades about -0.24 of its total potential returns per unit of risk. Ambev SA is currently generating about 0.03 per unit of volatility. If you would invest  1,299  in Ambev SA on September 4, 2024 and sell it today you would earn a total of  26.00  from holding Ambev SA or generate 2.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.41%
Values	Daily Returns

Camil Alimentos SA  vs.  Ambev SA

Camil Alimentos SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Camil Alimentos SA has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Ambev SA

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Ambev SA are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Ambev SA is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Camil Alimentos and Ambev SA

The main advantage of trading using opposite Camil Alimentos and Ambev SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Camil Alimentos 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.

The idea behind Camil Alimentos SA and Ambev SA 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.