Correlation Between Compania Cervecerias and Shineco
Can any of the company-specific risk be diversified away by investing in both Compania Cervecerias and Shineco 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 Shineco 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 Shineco, you can compare the effects of market volatilities on Compania Cervecerias and Shineco 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 Shineco. Check out your portfolio center. Please also check ongoing floating volatility patterns of Compania Cervecerias and Shineco.
Diversification Opportunities for Compania Cervecerias and Shineco
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Compania and Shineco is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Compania Cervecerias Unidas and Shineco in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shineco 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 Shineco. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shineco has no effect on the direction of Compania Cervecerias i.e., Compania Cervecerias and Shineco go up and down completely randomly.
Pair Corralation between Compania Cervecerias and Shineco
Considering the 90-day investment horizon Compania Cervecerias Unidas is expected to under-perform the Shineco. But the stock apears to be less risky and, when comparing its historical volatility, Compania Cervecerias Unidas is 39.19 times less risky than Shineco. The stock trades about -0.02 of its potential returns per unit of risk. The Shineco is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 257.00 in Shineco on September 2, 2024 and sell it today you would lose (10.00) from holding Shineco or give up 3.89% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Compania Cervecerias Unidas vs. Shineco
Performance |
| Timeline |
| Compania Cervecerias |
| Shineco |
Compania Cervecerias and Shineco Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Compania Cervecerias and Shineco
The main advantage of trading using opposite Compania Cervecerias and Shineco positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Compania Cervecerias position performs unexpectedly, Shineco 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 Shineco will offset losses from the drop in Shineco'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 |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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