Correlation Between FirstService Corp and Compania Cervecerias

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

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

Diversification Opportunities for FirstService Corp and Compania Cervecerias

-0.57

Correlation Coefficient

FirstService Corp  Compania Cervecerias

Excellent diversification

The 3 months correlation between FirstService and Compania is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding FirstService Corp and Compania Cervecerias Unidas in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Compania Cervecerias and FirstService Corp 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 FirstService Corp 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 FirstService Corp i.e., FirstService Corp and Compania Cervecerias go up and down completely randomly.

Pair Corralation between FirstService Corp and Compania Cervecerias

Considering the 90-day investment horizon FirstService Corp is expected to generate 1.07 times more return on investment than Compania Cervecerias. However, FirstService Corp is 1.07 times more volatile than Compania Cervecerias Unidas. It trades about 0.13 of its potential returns per unit of risk. Compania Cervecerias Unidas is currently generating about -0.3 per unit of risk. If you would invest  17,590  in FirstService Corp on May 2, 2025 and sell it today you would earn a total of  2,228  from holding FirstService Corp or generate 12.67% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	98.39%
Values	Daily Returns

FirstService Corp  vs.  Compania Cervecerias Unidas

FirstService Corp

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in FirstService Corp are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, FirstService Corp showed solid returns over the last few months and may actually be approaching a breakup point.

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 August 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with FirstService Corp and Compania Cervecerias

The main advantage of trading using opposite FirstService Corp and Compania Cervecerias positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FirstService Corp 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 FirstService Corp 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.