Correlation Between Cannae Holdings and Compania Cervecerias
Can any of the company-specific risk be diversified away by investing in both Cannae Holdings 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 Cannae Holdings and Compania Cervecerias into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cannae Holdings and Compania Cervecerias Unidas, you can compare the effects of market volatilities on Cannae Holdings 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 Cannae Holdings with a short position of Compania Cervecerias. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cannae Holdings and Compania Cervecerias.
Diversification Opportunities for Cannae Holdings and Compania Cervecerias
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Cannae and Compania is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Cannae Holdings and Compania Cervecerias Unidas in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Compania Cervecerias and Cannae Holdings 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 Cannae Holdings 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 Cannae Holdings i.e., Cannae Holdings and Compania Cervecerias go up and down completely randomly.
Pair Corralation between Cannae Holdings and Compania Cervecerias
Given the investment horizon of 90 days Cannae Holdings is expected to generate 8.52 times less return on investment than Compania Cervecerias. In addition to that, Cannae Holdings is 1.47 times more volatile than Compania Cervecerias Unidas. It trades about 0.03 of its total potential returns per unit of risk. Compania Cervecerias Unidas is currently generating about 0.33 per unit of volatility. If you would invest 1,141 in Compania Cervecerias Unidas on November 3, 2024 and sell it today you would earn a total of 73.50 from holding Compania Cervecerias Unidas or generate 6.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cannae Holdings vs. Compania Cervecerias Unidas
Performance |
| Timeline |
| Cannae Holdings |
| Compania Cervecerias |
Cannae Holdings and Compania Cervecerias Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cannae Holdings and Compania Cervecerias
The main advantage of trading using opposite Cannae Holdings and Compania Cervecerias positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cannae Holdings 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.| Cannae Holdings vs. Adtalem Global Education | Cannae Holdings vs. Hamilton Lane | Cannae Holdings vs. ConnectOne Bancorp |
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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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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