Correlation Between Compania Cervecerias and Kura Sushi
Can any of the company-specific risk be diversified away by investing in both Compania Cervecerias and Kura Sushi 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 Kura Sushi 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 Kura Sushi USA, you can compare the effects of market volatilities on Compania Cervecerias and Kura Sushi 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 Kura Sushi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Compania Cervecerias and Kura Sushi.
Diversification Opportunities for Compania Cervecerias and Kura Sushi
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Compania and Kura is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Compania Cervecerias Unidas and Kura Sushi USA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kura Sushi USA 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 Kura Sushi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kura Sushi USA has no effect on the direction of Compania Cervecerias i.e., Compania Cervecerias and Kura Sushi go up and down completely randomly.
Pair Corralation between Compania Cervecerias and Kura Sushi
Considering the 90-day investment horizon Compania Cervecerias Unidas is expected to under-perform the Kura Sushi. But the stock apears to be less risky and, when comparing its historical volatility, Compania Cervecerias Unidas is 2.66 times less risky than Kura Sushi. The stock trades about -0.05 of its potential returns per unit of risk. The Kura Sushi USA is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 9,856 in Kura Sushi USA on August 29, 2024 and sell it today you would earn a total of 668.50 from holding Kura Sushi USA or generate 6.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Compania Cervecerias Unidas vs. Kura Sushi USA
Performance |
| Timeline |
| Compania Cervecerias |
| Kura Sushi USA |
Compania Cervecerias and Kura Sushi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Compania Cervecerias and Kura Sushi
The main advantage of trading using opposite Compania Cervecerias and Kura Sushi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Compania Cervecerias position performs unexpectedly, Kura Sushi 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 Kura Sushi will offset losses from the drop in Kura Sushi's long position.| Compania Cervecerias vs. Fomento Economico Mexicano | Compania Cervecerias vs. Carlsberg AS | Compania Cervecerias vs. Molson Coors Beverage | Compania Cervecerias vs. Molson Coors Brewing |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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