Correlation Between Modine Manufacturing and Compania Cervecerias
Can any of the company-specific risk be diversified away by investing in both Modine Manufacturing 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 Modine Manufacturing and Compania Cervecerias into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Modine Manufacturing and Compania Cervecerias Unidas, you can compare the effects of market volatilities on Modine Manufacturing 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 Modine Manufacturing with a short position of Compania Cervecerias. Check out your portfolio center. Please also check ongoing floating volatility patterns of Modine Manufacturing and Compania Cervecerias.
Diversification Opportunities for Modine Manufacturing and Compania Cervecerias
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Modine and Compania is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Modine Manufacturing and Compania Cervecerias Unidas in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Compania Cervecerias and Modine Manufacturing 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 Modine Manufacturing 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 Modine Manufacturing i.e., Modine Manufacturing and Compania Cervecerias go up and down completely randomly.
Pair Corralation between Modine Manufacturing and Compania Cervecerias
Considering the 90-day investment horizon Modine Manufacturing is expected to generate 1.76 times more return on investment than Compania Cervecerias. However, Modine Manufacturing is 1.76 times more volatile than Compania Cervecerias Unidas. It trades about 0.17 of its potential returns per unit of risk. Compania Cervecerias Unidas is currently generating about -0.04 per unit of risk. If you would invest 3,281 in Modine Manufacturing on March 4, 2024 and sell it today you would earn a total of 6,811 from holding Modine Manufacturing or generate 207.59% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Modine Manufacturing vs. Compania Cervecerias Unidas
Performance |
Timeline |
Modine Manufacturing |
Compania Cervecerias |
Modine Manufacturing and Compania Cervecerias Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Modine Manufacturing and Compania Cervecerias
The main advantage of trading using opposite Modine Manufacturing and Compania Cervecerias positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Modine Manufacturing 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.Modine Manufacturing vs. Honda Motor Co | Modine Manufacturing vs. Ferrari NV | Modine Manufacturing vs. Toyota Motor | Modine Manufacturing vs. Stellantis NV |
Compania Cervecerias vs. Fomento Economico Mexicano | Compania Cervecerias vs. Heineken NV | Compania Cervecerias vs. Suntory Beverage Food |
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 CEOs Directory module to screen CEOs from public companies around the world.
Other Complementary Tools
Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
CEOs Directory Screen CEOs from public companies around the world | |
Money Managers Screen money managers from public funds and ETFs managed around the world | |
Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital |