Correlation Between Ambev SA and DoubleVerify Holdings

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

Diversification Opportunities for Ambev SA and DoubleVerify Holdings

  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between Ambev and DoubleVerify is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding Ambev SA ADR and DoubleVerify Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DoubleVerify Holdings 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 DoubleVerify Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DoubleVerify Holdings has no effect on the direction of Ambev SA i.e., Ambev SA and DoubleVerify Holdings go up and down completely randomly.

Pair Corralation between Ambev SA and DoubleVerify Holdings

Given the investment horizon of 90 days Ambev SA ADR is expected to generate 0.66 times more return on investment than DoubleVerify Holdings. However, Ambev SA ADR is 1.52 times less risky than DoubleVerify Holdings. It trades about 0.09 of its potential returns per unit of risk. DoubleVerify Holdings is currently generating about -0.06 per unit of risk. If you would invest  263.00  in Ambev SA ADR on December 1, 2023 and sell it today you would earn a total of  6.00  from holding Ambev SA ADR or generate 2.28% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
ValuesDaily Returns

Ambev SA ADR  vs.  DoubleVerify Holdings

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 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.
DoubleVerify Holdings 

Risk-Adjusted Performance

11 of 100

Compared to the overall equity markets, risk-adjusted returns on investments in DoubleVerify Holdings are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of fairly inconsistent basic indicators, DoubleVerify Holdings showed solid returns over the last few months and may actually be approaching a breakup point.

Ambev SA and DoubleVerify Holdings Volatility Contrast

   Predicted Return Density   

Pair Trading with Ambev SA and DoubleVerify Holdings

The main advantage of trading using opposite Ambev SA and DoubleVerify Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ambev SA position performs unexpectedly, DoubleVerify Holdings 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 DoubleVerify Holdings will offset losses from the drop in DoubleVerify Holdings' long position.
The idea behind Ambev SA ADR and DoubleVerify Holdings 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..

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