Correlation Between Ambev SA and Avepoint

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

Diversification Opportunities for Ambev SA and Avepoint

0.16
  Correlation Coefficient

Average diversification

The 3 months correlation between Ambev and Avepoint is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Ambev SA ADR and Avepoint in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Avepoint 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 Avepoint. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Avepoint has no effect on the direction of Ambev SA i.e., Ambev SA and Avepoint go up and down completely randomly.

Pair Corralation between Ambev SA and Avepoint

Given the investment horizon of 90 days Ambev SA ADR is expected to generate 0.66 times more return on investment than Avepoint. However, Ambev SA ADR is 1.51 times less risky than Avepoint. It trades about 0.01 of its potential returns per unit of risk. Avepoint is currently generating about -0.04 per unit of risk. If you would invest  295.00  in Ambev SA ADR on September 7, 2022 and sell it today you would earn a total of  6.00  from holding Ambev SA ADR or generate 2.03% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Ambev SA ADR  vs.  Avepoint

 Performance (%) 
       Timeline  
Ambev SA ADR 
Ambev Performance
1 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Ambev SA ADR are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable technical and fundamental indicators, Ambev SA is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Ambev Price Channel

Avepoint 
Avepoint Performance
3 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Avepoint are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Avepoint may actually be approaching a critical reversion point that can send shares even higher in January 2023.

Avepoint Price Channel

Ambev SA and Avepoint Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Ambev SA and Avepoint

The main advantage of trading using opposite Ambev SA and Avepoint positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ambev SA position performs unexpectedly, Avepoint 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 Avepoint will offset losses from the drop in Avepoint's long position.
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The idea behind Ambev SA ADR and Avepoint 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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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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.

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