Correlation Between Compania Cervecerias and Companhia Energetica
Can any of the company-specific risk be diversified away by investing in both Compania Cervecerias and Companhia Energetica 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 Companhia Energetica 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 Companhia Energetica de, you can compare the effects of market volatilities on Compania Cervecerias and Companhia Energetica 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 Companhia Energetica. Check out your portfolio center. Please also check ongoing floating volatility patterns of Compania Cervecerias and Companhia Energetica.
Diversification Opportunities for Compania Cervecerias and Companhia Energetica
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between Compania and Companhia is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Compania Cervecerias Unidas and Companhia Energetica de in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Companhia Energetica 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 Companhia Energetica. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Companhia Energetica has no effect on the direction of Compania Cervecerias i.e., Compania Cervecerias and Companhia Energetica go up and down completely randomly.
Pair Corralation between Compania Cervecerias and Companhia Energetica
Considering the 90-day investment horizon Compania Cervecerias Unidas is expected to under-perform the Companhia Energetica. But the stock apears to be less risky and, when comparing its historical volatility, Compania Cervecerias Unidas is 1.1 times less risky than Companhia Energetica. The stock trades about -0.13 of its potential returns per unit of risk. The Companhia Energetica de is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 188.00 in Companhia Energetica de on May 29, 2025 and sell it today you would earn a total of 11.00 from holding Companhia Energetica de or generate 5.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Compania Cervecerias Unidas vs. Companhia Energetica de
Performance |
| Timeline |
| Compania Cervecerias |
| Companhia Energetica |
Compania Cervecerias and Companhia Energetica Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Compania Cervecerias and Companhia Energetica
The main advantage of trading using opposite Compania Cervecerias and Companhia Energetica positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Compania Cervecerias position performs unexpectedly, Companhia Energetica 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 Companhia Energetica will offset losses from the drop in Companhia Energetica's long position.| Compania Cervecerias vs. Fomento Economico Mexicano | Compania Cervecerias vs. Ambev SA ADR | Compania Cervecerias vs. Boston Beer | Compania Cervecerias vs. Carlsberg AS |
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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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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