Correlation Between 04686JAE1 and Compania Cervecerias

Can any of the company-specific risk be diversified away by investing in both 04686JAE1 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 04686JAE1 and Compania Cervecerias into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between ATH 345 15 MAY 52 and Compania Cervecerias Unidas, you can compare the effects of market volatilities on 04686JAE1 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 04686JAE1 with a short position of Compania Cervecerias. Check out your portfolio center. Please also check ongoing floating volatility patterns of 04686JAE1 and Compania Cervecerias.

Diversification Opportunities for 04686JAE1 and Compania Cervecerias

-0.31

Correlation Coefficient

04686JAE1  Compania Cervecerias

Very good diversification

The 3 months correlation between 04686JAE1 and Compania is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding ATH 345 15 MAY 52 and Compania Cervecerias Unidas in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Compania Cervecerias and 04686JAE1 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 ATH 345 15 MAY 52 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 04686JAE1 i.e., 04686JAE1 and Compania Cervecerias go up and down completely randomly.

Pair Corralation between 04686JAE1 and Compania Cervecerias

Assuming the 90 days trading horizon ATH 345 15 MAY 52 is expected to generate 1.2 times more return on investment than Compania Cervecerias. However, 04686JAE1 is 1.2 times more volatile than Compania Cervecerias Unidas. It trades about 0.01 of its potential returns per unit of risk. Compania Cervecerias Unidas is currently generating about -0.02 per unit of risk. If you would invest  6,770  in ATH 345 15 MAY 52 on October 23, 2024 and sell it today you would earn a total of  135.00  from holding ATH 345 15 MAY 52 or generate 1.99% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	81.62%
Values	Daily Returns

ATH 345 15 MAY 52  vs.  Compania Cervecerias Unidas

ATH 345 15

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in ATH 345 15 MAY 52 are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unfluctuating basic indicators, 04686JAE1 may actually be approaching a critical reversion point that can send shares even higher in February 2025.

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 recent stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with 04686JAE1 and Compania Cervecerias

The main advantage of trading using opposite 04686JAE1 and Compania Cervecerias positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 04686JAE1 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.

The idea behind ATH 345 15 MAY 52 and Compania Cervecerias Unidas 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.