Correlation Between Compania Cervecerias and Stardust Power

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

Diversification Opportunities for Compania Cervecerias and Stardust Power

0.33

Correlation Coefficient

Compania Cervecerias  Stardust Power

Weak diversification

The 3 months correlation between Compania and Stardust is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Compania Cervecerias Unidas and Stardust Power in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stardust Power 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 Stardust Power. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stardust Power has no effect on the direction of Compania Cervecerias i.e., Compania Cervecerias and Stardust Power go up and down completely randomly.

Pair Corralation between Compania Cervecerias and Stardust Power

Considering the 90-day investment horizon Compania Cervecerias Unidas is expected to under-perform the Stardust Power. But the stock apears to be less risky and, when comparing its historical volatility, Compania Cervecerias Unidas is 10.0 times less risky than Stardust Power. The stock trades about -0.13 of its potential returns per unit of risk. The Stardust Power is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  59.00  in Stardust Power on May 26, 2025 and sell it today you would lose (19.00) from holding Stardust Power or give up 32.2% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Compania Cervecerias Unidas  vs.  Stardust Power

Compania Cervecerias

Risk-Adjusted Performance

Weakest

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 latest weak performance, the Stock's fundamental indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Stardust Power

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Stardust Power are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Stardust Power unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Compania Cervecerias and Stardust Power

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

The idea behind Compania Cervecerias Unidas and Stardust Power 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.