Correlation Between Kirin Holdings and Compania Cervecerias
Can any of the company-specific risk be diversified away by investing in both Kirin 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 Kirin 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 Kirin Holdings Co and Compania Cervecerias Unidas, you can compare the effects of market volatilities on Kirin 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 Kirin Holdings with a short position of Compania Cervecerias. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kirin Holdings and Compania Cervecerias.
Diversification Opportunities for Kirin Holdings and Compania Cervecerias
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between Kirin and Compania is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Kirin Holdings Co and Compania Cervecerias Unidas in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Compania Cervecerias and Kirin 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 Kirin Holdings Co 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 Kirin Holdings i.e., Kirin Holdings and Compania Cervecerias go up and down completely randomly.
Pair Corralation between Kirin Holdings and Compania Cervecerias
Assuming the 90 days horizon Kirin Holdings Co is expected to under-perform the Compania Cervecerias. But the pink sheet apears to be less risky and, when comparing its historical volatility, Kirin Holdings Co is 1.39 times less risky than Compania Cervecerias. The pink sheet trades about -0.02 of its potential returns per unit of risk. The Compania Cervecerias Unidas is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 1,144 in Compania Cervecerias Unidas on August 28, 2024 and sell it today you would lose (39.00) from holding Compania Cervecerias Unidas or give up 3.41% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 31.72% |
| Values | Daily Returns |
Kirin Holdings Co vs. Compania Cervecerias Unidas
Performance |
| Timeline |
| Kirin Holdings |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Compania Cervecerias |
Kirin Holdings and Compania Cervecerias Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kirin Holdings and Compania Cervecerias
The main advantage of trading using opposite Kirin Holdings and Compania Cervecerias positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kirin 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.| Kirin Holdings vs. Tsingtao Brewery Co | Kirin Holdings vs. Suntory Beverage Food | Kirin Holdings vs. Heineken NV | Kirin Holdings vs. Compania Cervecerias Unidas |
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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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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