Correlation Between Compania Cervecerias and CVR Partners

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

Diversification Opportunities for Compania Cervecerias and CVR Partners

-0.88

Correlation Coefficient

Compania Cervecerias  CVR Partners

Pay attention - limited upside

The 3 months correlation between Compania and CVR is -0.88. Overlapping area represents the amount of risk that can be diversified away by holding Compania Cervecerias Unidas and CVR Partners LP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CVR Partners LP 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 CVR Partners. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CVR Partners LP has no effect on the direction of Compania Cervecerias i.e., Compania Cervecerias and CVR Partners go up and down completely randomly.

Pair Corralation between Compania Cervecerias and CVR Partners

Considering the 90-day investment horizon Compania Cervecerias Unidas is expected to under-perform the CVR Partners. In addition to that, Compania Cervecerias is 1.16 times more volatile than CVR Partners LP. It trades about -0.29 of its total potential returns per unit of risk. CVR Partners LP is currently generating about 0.27 per unit of volatility. If you would invest  7,781  in CVR Partners LP on May 3, 2025 and sell it today you would earn a total of  1,787  from holding CVR Partners LP or generate 22.97% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Compania Cervecerias Unidas  vs.  CVR Partners LP

Compania Cervecerias

Risk-Adjusted Performance

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 weak performance in the last few months, the Stock's fundamental indicators remain comparatively stable which may send shares a bit higher in September 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

CVR Partners LP

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in CVR Partners LP are ranked lower than 21 (%) of all global equities and portfolios over the last 90 days. In spite of very fragile basic indicators, CVR Partners displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Compania Cervecerias and CVR Partners

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

The idea behind Compania Cervecerias Unidas and CVR Partners LP 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.