Correlation Between WIMFARM SA and United Breweries
Can any of the company-specific risk be diversified away by investing in both WIMFARM SA and United Breweries 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 WIMFARM SA and United Breweries into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between WIMFARM SA EO and United Breweries Co, you can compare the effects of market volatilities on WIMFARM SA and United Breweries 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 WIMFARM SA with a short position of United Breweries. Check out your portfolio center. Please also check ongoing floating volatility patterns of WIMFARM SA and United Breweries.
Diversification Opportunities for WIMFARM SA and United Breweries
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between WIMFARM and United is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding WIMFARM SA EO and United Breweries Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on United Breweries and WIMFARM SA 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 WIMFARM SA EO are associated (or correlated) with United Breweries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of United Breweries has no effect on the direction of WIMFARM SA i.e., WIMFARM SA and United Breweries go up and down completely randomly.
Pair Corralation between WIMFARM SA and United Breweries
Assuming the 90 days horizon WIMFARM SA EO is expected to under-perform the United Breweries. In addition to that, WIMFARM SA is 1.98 times more volatile than United Breweries Co. It trades about -0.06 of its total potential returns per unit of risk. United Breweries Co is currently generating about 0.0 per unit of volatility. If you would invest 1,093 in United Breweries Co on September 1, 2024 and sell it today you would lose (33.00) from holding United Breweries Co or give up 3.02% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
WIMFARM SA EO vs. United Breweries Co
Performance |
| Timeline |
| WIMFARM SA EO |
| United Breweries |
WIMFARM SA and United Breweries Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WIMFARM SA and United Breweries
The main advantage of trading using opposite WIMFARM SA and United Breweries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WIMFARM SA position performs unexpectedly, United Breweries 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 United Breweries will offset losses from the drop in United Breweries' long position.| WIMFARM SA vs. UPDATE SOFTWARE | WIMFARM SA vs. XLMedia PLC | WIMFARM SA vs. GigaMedia | WIMFARM SA vs. FUYO GENERAL LEASE |
| United Breweries vs. TYSON FOODS A | United Breweries vs. Austevoll Seafood ASA | United Breweries vs. FUTURE GAMING GRP | United Breweries vs. THAI BEVERAGE |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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