Correlation Between Compania General and Compania Cervecerias
Can any of the company-specific risk be diversified away by investing in both Compania General and Compania Cervecerias 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 General and Compania Cervecerias into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Compania General de and Compania Cervecerias Unidas, you can compare the effects of market volatilities on Compania General and Compania Cervecerias 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 General with a short position of Compania Cervecerias. Check out your portfolio center. Please also check ongoing floating volatility patterns of Compania General and Compania Cervecerias.
Diversification Opportunities for Compania General and Compania Cervecerias
-0.73 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Compania and Compania is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding Compania General de and Compania Cervecerias Unidas in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Compania Cervecerias and Compania General 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 General de are associated (or correlated) with Compania Cervecerias. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Compania Cervecerias has no effect on the direction of Compania General i.e., Compania General and Compania Cervecerias go up and down completely randomly.
Pair Corralation between Compania General and Compania Cervecerias
Assuming the 90 days trading horizon Compania General de is expected to generate 0.46 times more return on investment than Compania Cervecerias. However, Compania General de is 2.17 times less risky than Compania Cervecerias. It trades about 0.33 of its potential returns per unit of risk. Compania Cervecerias Unidas is currently generating about 0.08 per unit of risk. If you would invest 29,700 in Compania General de on August 28, 2024 and sell it today you would earn a total of 981.00 from holding Compania General de or generate 3.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 89.47% |
| Values | Daily Returns |
Compania General de vs. Compania Cervecerias Unidas
Performance |
| Timeline |
| Compania General |
| Compania Cervecerias |
Compania General and Compania Cervecerias Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Compania General and Compania Cervecerias
The main advantage of trading using opposite Compania General and Compania Cervecerias positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Compania General position performs unexpectedly, Compania Cervecerias 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 Compania Cervecerias will offset losses from the drop in Compania Cervecerias' long position.| Compania General vs. Embotelladora Andina SA | Compania General vs. Administradora Americana de | Compania General vs. Las Condes | Compania General vs. Salfacorp |
| Compania Cervecerias vs. Falabella | Compania Cervecerias vs. Empresas Copec SA | Compania Cervecerias vs. Cencosud | Compania Cervecerias vs. Salfacorp |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
Other Complementary Tools
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets |