Correlation Between Compania Cervecerias and Capital Clean

Can any of the company-specific risk be diversified away by investing in both Compania Cervecerias and Capital Clean 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 Capital Clean 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 Capital Clean Energy, you can compare the effects of market volatilities on Compania Cervecerias and Capital Clean 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 Capital Clean. Check out your portfolio center. Please also check ongoing floating volatility patterns of Compania Cervecerias and Capital Clean.

Diversification Opportunities for Compania Cervecerias and Capital Clean

-0.18

Correlation Coefficient

Compania Cervecerias  Capital Clean

Good diversification

The 3 months correlation between Compania and Capital is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Compania Cervecerias Unidas and Capital Clean Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Capital Clean Energy 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 Capital Clean. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Capital Clean Energy has no effect on the direction of Compania Cervecerias i.e., Compania Cervecerias and Capital Clean go up and down completely randomly.

Pair Corralation between Compania Cervecerias and Capital Clean

Considering the 90-day investment horizon Compania Cervecerias Unidas is expected to under-perform the Capital Clean. But the stock apears to be less risky and, when comparing its historical volatility, Compania Cervecerias Unidas is 1.08 times less risky than Capital Clean. The stock trades about 0.0 of its potential returns per unit of risk. The Capital Clean Energy is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  1,220  in Capital Clean Energy on September 26, 2024 and sell it today you would earn a total of  633.00  from holding Capital Clean Energy or generate 51.89% 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.  Capital Clean Energy

Compania Cervecerias

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Compania Cervecerias Unidas has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable fundamental indicators, Compania Cervecerias is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Capital Clean Energy

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Capital Clean Energy has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, Capital Clean is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Compania Cervecerias and Capital Clean

The main advantage of trading using opposite Compania Cervecerias and Capital Clean positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Compania Cervecerias position performs unexpectedly, Capital Clean 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 Capital Clean will offset losses from the drop in Capital Clean's long position.

The idea behind Compania Cervecerias Unidas and Capital Clean Energy pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.