Correlation Between Compania Cervecerias and China Resources
Can any of the company-specific risk be diversified away by investing in both Compania Cervecerias and China Resources 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 Compania Cervecerias and China Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Compania Cervecerias Unidas and China Resources Beer, you can compare the effects of market volatilities on Compania Cervecerias and China Resources 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 Compania Cervecerias with a short position of China Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Compania Cervecerias and China Resources.
Diversification Opportunities for Compania Cervecerias and China Resources
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between Compania and China is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Compania Cervecerias Unidas and China Resources Beer in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Resources Beer and Compania Cervecerias 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 Compania Cervecerias Unidas are associated (or correlated) with China Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Resources Beer has no effect on the direction of Compania Cervecerias i.e., Compania Cervecerias and China Resources go up and down completely randomly.
Pair Corralation between Compania Cervecerias and China Resources
Considering the 90-day investment horizon Compania Cervecerias Unidas is expected to under-perform the China Resources. But the stock apears to be less risky and, when comparing its historical volatility, Compania Cervecerias Unidas is 6.09 times less risky than China Resources. The stock trades about 0.0 of its potential returns per unit of risk. The China Resources Beer is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 261.00 in China Resources Beer on October 21, 2024 and sell it today you would earn a total of 32.00 from holding China Resources Beer or generate 12.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 90.48% |
| Values | Daily Returns |
Compania Cervecerias Unidas vs. China Resources Beer
Performance |
| Timeline |
| Compania Cervecerias |
| China Resources Beer |
Compania Cervecerias and China Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Compania Cervecerias and China Resources
The main advantage of trading using opposite Compania Cervecerias and China Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Compania Cervecerias position performs unexpectedly, China Resources 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 China Resources will offset losses from the drop in China Resources' long position.| Compania Cervecerias vs. Boston Beer | Compania Cervecerias vs. Molson Coors Beverage | Compania Cervecerias vs. Ambev SA ADR | Compania Cervecerias vs. Molson Coors Brewing |
| China Resources vs. Tsingtao Brewery Co | China Resources vs. Budweiser Brewing | China Resources vs. Boston Beer | China Resources vs. Anheuser Busch Inbev |
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 the Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume |