Correlation Between Compania Cervecerias and Vasta Platform
Can any of the company-specific risk be diversified away by investing in both Compania Cervecerias and Vasta Platform 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 Vasta Platform 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 Vasta Platform, you can compare the effects of market volatilities on Compania Cervecerias and Vasta Platform 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 Vasta Platform. Check out your portfolio center. Please also check ongoing floating volatility patterns of Compania Cervecerias and Vasta Platform.
Diversification Opportunities for Compania Cervecerias and Vasta Platform
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Compania and Vasta is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Compania Cervecerias Unidas and Vasta Platform in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vasta Platform 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 Vasta Platform. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vasta Platform has no effect on the direction of Compania Cervecerias i.e., Compania Cervecerias and Vasta Platform go up and down completely randomly.
Pair Corralation between Compania Cervecerias and Vasta Platform
Considering the 90-day investment horizon Compania Cervecerias Unidas is expected to under-perform the Vasta Platform. But the stock apears to be less risky and, when comparing its historical volatility, Compania Cervecerias Unidas is 4.93 times less risky than Vasta Platform. The stock trades about -0.04 of its potential returns per unit of risk. The Vasta Platform is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 221.00 in Vasta Platform on October 11, 2024 and sell it today you would earn a total of 9.00 from holding Vasta Platform or generate 4.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Compania Cervecerias Unidas vs. Vasta Platform
Performance |
| Timeline |
| Compania Cervecerias |
| Vasta Platform |
Compania Cervecerias and Vasta Platform Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Compania Cervecerias and Vasta Platform
The main advantage of trading using opposite Compania Cervecerias and Vasta Platform positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Compania Cervecerias position performs unexpectedly, Vasta Platform 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 Vasta Platform will offset losses from the drop in Vasta Platform'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 |
| Vasta Platform vs. Strategic Education | Vasta Platform vs. Grand Canyon Education | Vasta Platform vs. Universal Technical Institute | Vasta Platform vs. Laureate Education |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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