Correlation Between Compania Cervecerias and Coca Cola
Can any of the company-specific risk be diversified away by investing in both Compania Cervecerias and Coca Cola 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 Coca Cola 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 The Coca Cola, you can compare the effects of market volatilities on Compania Cervecerias and Coca Cola 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 Coca Cola. Check out your portfolio center. Please also check ongoing floating volatility patterns of Compania Cervecerias and Coca Cola.
Diversification Opportunities for Compania Cervecerias and Coca Cola
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Compania and Coca is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Compania Cervecerias Unidas and The Coca Cola in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Coca Cola 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 Coca Cola. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Coca Cola has no effect on the direction of Compania Cervecerias i.e., Compania Cervecerias and Coca Cola go up and down completely randomly.
Pair Corralation between Compania Cervecerias and Coca Cola
Considering the 90-day investment horizon Compania Cervecerias Unidas is expected to generate 3.13 times more return on investment than Coca Cola. However, Compania Cervecerias is 3.13 times more volatile than The Coca Cola. It trades about 0.08 of its potential returns per unit of risk. The Coca Cola is currently generating about -0.03 per unit of risk. If you would invest 1,251 in Compania Cervecerias Unidas on February 29, 2024 and sell it today you would earn a total of 30.00 from holding Compania Cervecerias Unidas or generate 2.4% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Compania Cervecerias Unidas vs. The Coca Cola
Performance |
Timeline |
Compania Cervecerias |
Coca Cola |
Compania Cervecerias and Coca Cola Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Compania Cervecerias and Coca Cola
The main advantage of trading using opposite Compania Cervecerias and Coca Cola positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Compania Cervecerias position performs unexpectedly, Coca Cola 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 Coca Cola will offset losses from the drop in Coca Cola's long position.Compania Cervecerias vs. Molson Coors Beverage | Compania Cervecerias vs. Heineken NV | Compania Cervecerias vs. Budweiser Brewing | Compania Cervecerias vs. Anheuser Busch InBev SANV |
Coca Cola vs. Monster Beverage Corp | Coca Cola vs. Celsius Holdings | Coca Cola vs. Coca Cola Consolidated | Coca Cola vs. Keurig Dr Pepper |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
Other Complementary Tools
Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments |