Correlation Between Everspin Technologies and Ambev SA

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

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

Diversification Opportunities for Everspin Technologies and Ambev SA

-0.24

Correlation Coefficient

Everspin Technologies  Ambev SA

Very good diversification

The 3 months correlation between Everspin and Ambev is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Everspin Technologies 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 Everspin Technologies 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 Everspin Technologies 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 Everspin Technologies i.e., Everspin Technologies and Ambev SA go up and down completely randomly.

Pair Corralation between Everspin Technologies and Ambev SA

Given the investment horizon of 90 days Everspin Technologies is expected to generate 0.98 times more return on investment than Ambev SA. However, Everspin Technologies is 1.02 times less risky than Ambev SA. It trades about 0.13 of its potential returns per unit of risk. Ambev SA ADR is currently generating about -0.09 per unit of risk. If you would invest  590.00  in Everspin Technologies on September 19, 2024 and sell it today you would earn a total of  33.00  from holding Everspin Technologies or generate 5.59% return on investment over 90 days.

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

Everspin Technologies  vs.  Ambev SA ADR

Everspin Technologies

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Everspin Technologies are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of very weak basic indicators, Everspin Technologies may actually be approaching a critical reversion point that can send shares even higher in January 2025.

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 January 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Pair Trading with Everspin Technologies and Ambev SA

The main advantage of trading using opposite Everspin Technologies and Ambev SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Everspin Technologies 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 Everspin Technologies and Ambev SA ADR 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .