Correlation Between GWOCN and Compania Cervecerias

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

By analyzing existing cross correlation between GWOCN 904 12 AUG 25 and Compania Cervecerias Unidas, you can compare the effects of market volatilities on GWOCN 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 GWOCN with a short position of Compania Cervecerias. Check out your portfolio center. Please also check ongoing floating volatility patterns of GWOCN and Compania Cervecerias.

Diversification Opportunities for GWOCN and Compania Cervecerias

0.22

Correlation Coefficient

GWOCN  Compania Cervecerias

Modest diversification

The 3 months correlation between GWOCN and Compania is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding GWOCN 904 12 AUG 25 and Compania Cervecerias Unidas in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Compania Cervecerias and GWOCN 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 GWOCN 904 12 AUG 25 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 GWOCN i.e., GWOCN and Compania Cervecerias go up and down completely randomly.

Pair Corralation between GWOCN and Compania Cervecerias

Assuming the 90 days trading horizon GWOCN 904 12 AUG 25 is expected to under-perform the Compania Cervecerias. In addition to that, GWOCN is 2.0 times more volatile than Compania Cervecerias Unidas. It trades about -0.34 of its total potential returns per unit of risk. Compania Cervecerias Unidas is currently generating about 0.44 per unit of volatility. If you would invest  1,080  in Compania Cervecerias Unidas on September 15, 2024 and sell it today you would earn a total of  98.00  from holding Compania Cervecerias Unidas or generate 9.07% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	38.1%
Values	Daily Returns

GWOCN 904 12 AUG 25  vs.  Compania Cervecerias Unidas

GWOCN 904 12

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days GWOCN 904 12 AUG 25 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Bond's basic indicators remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for GWOCN 904 12 AUG 25 investors.

Compania Cervecerias

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Compania Cervecerias Unidas are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak fundamental indicators, Compania Cervecerias may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with GWOCN and Compania Cervecerias

The main advantage of trading using opposite GWOCN and Compania Cervecerias positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GWOCN 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 GWOCN 904 12 AUG 25 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.