Correlation Between Ambev SA and ScanSource

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

Diversification Opportunities for Ambev SA and ScanSource

0.15

Correlation Coefficient

Ambev SA  ScanSource

Average diversification

The 3 months correlation between Ambev and ScanSource is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Ambev SA ADR and ScanSource in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ScanSource 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 ScanSource. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ScanSource has no effect on the direction of Ambev SA i.e., Ambev SA and ScanSource go up and down completely randomly.

Pair Corralation between Ambev SA and ScanSource

Given the investment horizon of 90 days Ambev SA ADR is expected to under-perform the ScanSource. But the stock apears to be less risky and, when comparing its historical volatility, Ambev SA ADR is 1.04 times less risky than ScanSource. The stock trades about -0.1 of its potential returns per unit of risk. The ScanSource is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest  4,206  in ScanSource on May 13, 2025 and sell it today you would lose (74.00) from holding ScanSource or give up 1.76% of portfolio value over 90 days.

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

Ambev SA ADR  vs.  ScanSource

Ambev SA ADR

Risk-Adjusted Performance

Weakest

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 latest unsteady performance, the Stock's technical and fundamental indicators remain stable and the latest fuss on Wall Street may also be a sign of long-term gains for the venture sophisticated investors.

ScanSource

Risk-Adjusted Performance

Weakest

Over the last 90 days ScanSource has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, ScanSource is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Ambev SA and ScanSource

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

The idea behind Ambev SA ADR and ScanSource 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.