Correlation Between Compania Cervecerias and MCF Energy
Can any of the company-specific risk be diversified away by investing in both Compania Cervecerias and MCF Energy 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 MCF Energy 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 MCF Energy, you can compare the effects of market volatilities on Compania Cervecerias and MCF Energy 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 MCF Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Compania Cervecerias and MCF Energy.
Diversification Opportunities for Compania Cervecerias and MCF Energy
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Compania and MCF is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Compania Cervecerias Unidas and MCF Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MCF Energy 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 MCF Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MCF Energy has no effect on the direction of Compania Cervecerias i.e., Compania Cervecerias and MCF Energy go up and down completely randomly.
Pair Corralation between Compania Cervecerias and MCF Energy
Considering the 90-day investment horizon Compania Cervecerias Unidas is expected to generate 0.29 times more return on investment than MCF Energy. However, Compania Cervecerias Unidas is 3.43 times less risky than MCF Energy. It trades about 0.01 of its potential returns per unit of risk. MCF Energy is currently generating about -0.04 per unit of risk. If you would invest 1,186 in Compania Cervecerias Unidas on September 12, 2024 and sell it today you would lose (3.50) from holding Compania Cervecerias Unidas or give up 0.3% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 97.58% |
| Values | Daily Returns |
Compania Cervecerias Unidas vs. MCF Energy
Performance |
| Timeline |
| Compania Cervecerias |
| MCF Energy |
Compania Cervecerias and MCF Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Compania Cervecerias and MCF Energy
The main advantage of trading using opposite Compania Cervecerias and MCF Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Compania Cervecerias position performs unexpectedly, MCF Energy 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 MCF Energy will offset losses from the drop in MCF Energy's long position.| Compania Cervecerias vs. Fomento Economico Mexicano | Compania Cervecerias vs. Boston Beer | Compania Cervecerias vs. Carlsberg AS | Compania Cervecerias vs. Molson Coors Beverage |
| MCF Energy vs. Kaltura | MCF Energy vs. Univest Pennsylvania | MCF Energy vs. CDW Corp | MCF Energy vs. Paltalk |
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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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