Correlation Between Compania Cervecerias and GATX
Can any of the company-specific risk be diversified away by investing in both Compania Cervecerias and GATX 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 GATX 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 GATX Corporation, you can compare the effects of market volatilities on Compania Cervecerias and GATX 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 GATX. Check out your portfolio center. Please also check ongoing floating volatility patterns of Compania Cervecerias and GATX.
Diversification Opportunities for Compania Cervecerias and GATX
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Compania and GATX is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Compania Cervecerias Unidas and GATX Corp. in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GATX 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 GATX. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GATX has no effect on the direction of Compania Cervecerias i.e., Compania Cervecerias and GATX go up and down completely randomly.
Pair Corralation between Compania Cervecerias and GATX
Considering the 90-day investment horizon Compania Cervecerias is expected to generate 4.19 times less return on investment than GATX. In addition to that, Compania Cervecerias is 1.01 times more volatile than GATX Corporation. It trades about 0.02 of its total potential returns per unit of risk. GATX Corporation is currently generating about 0.09 per unit of volatility. If you would invest 11,581 in GATX Corporation on November 9, 2024 and sell it today you would earn a total of 5,064 from holding GATX Corporation or generate 43.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Compania Cervecerias Unidas vs. GATX Corp.
Performance |
| Timeline |
| Compania Cervecerias |
| GATX |
Compania Cervecerias and GATX Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Compania Cervecerias and GATX
The main advantage of trading using opposite Compania Cervecerias and GATX positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Compania Cervecerias position performs unexpectedly, GATX 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 GATX will offset losses from the drop in GATX's 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 |
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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 the Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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