Correlation Between CHINA EDUCATION and United Breweries
Can any of the company-specific risk be diversified away by investing in both CHINA EDUCATION 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 CHINA EDUCATION and United Breweries into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CHINA EDUCATION GROUP and United Breweries Co, you can compare the effects of market volatilities on CHINA EDUCATION 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 CHINA EDUCATION with a short position of United Breweries. Check out your portfolio center. Please also check ongoing floating volatility patterns of CHINA EDUCATION and United Breweries.
Diversification Opportunities for CHINA EDUCATION and United Breweries
-0.75 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between CHINA and United is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding CHINA EDUCATION GROUP and United Breweries Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on United Breweries and CHINA EDUCATION 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 CHINA EDUCATION GROUP 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 CHINA EDUCATION i.e., CHINA EDUCATION and United Breweries go up and down completely randomly.
Pair Corralation between CHINA EDUCATION and United Breweries
Assuming the 90 days horizon CHINA EDUCATION GROUP is expected to under-perform the United Breweries. In addition to that, CHINA EDUCATION is 2.18 times more volatile than United Breweries Co. It trades about -0.03 of its total potential returns per unit of risk. United Breweries Co is currently generating about 0.04 per unit of volatility. If you would invest 1,044 in United Breweries Co on October 18, 2024 and sell it today you would earn a total of 76.00 from holding United Breweries Co or generate 7.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CHINA EDUCATION GROUP vs. United Breweries Co
Performance |
| Timeline |
| CHINA EDUCATION GROUP |
| United Breweries |
CHINA EDUCATION and United Breweries Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CHINA EDUCATION and United Breweries
The main advantage of trading using opposite CHINA EDUCATION and United Breweries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CHINA EDUCATION 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.| CHINA EDUCATION vs. CSSC Offshore Marine | CHINA EDUCATION vs. NAGOYA RAILROAD | CHINA EDUCATION vs. Transport International Holdings | CHINA EDUCATION vs. SAFEROADS HLDGS |
| United Breweries vs. CHINA EDUCATION GROUP | United Breweries vs. WIZZ AIR HLDGUNSPADR4 | United Breweries vs. Strategic Education | United Breweries vs. Laureate Education |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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