Correlation Between Coca-Cola Consolidated and United Breweries
Can any of the company-specific risk be diversified away by investing in both Coca-Cola Consolidated 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 Coca-Cola Consolidated and United Breweries into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Coca Cola Consolidated and United Breweries Co, you can compare the effects of market volatilities on Coca-Cola Consolidated 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 Coca-Cola Consolidated with a short position of United Breweries. Check out your portfolio center. Please also check ongoing floating volatility patterns of Coca-Cola Consolidated and United Breweries.
Diversification Opportunities for Coca-Cola Consolidated and United Breweries
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Coca-Cola and United is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Coca Cola Consolidated and United Breweries Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on United Breweries and Coca-Cola Consolidated 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 Coca Cola Consolidated 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 Coca-Cola Consolidated i.e., Coca-Cola Consolidated and United Breweries go up and down completely randomly.
Pair Corralation between Coca-Cola Consolidated and United Breweries
Assuming the 90 days horizon Coca Cola Consolidated is expected to generate 1.11 times more return on investment than United Breweries. However, Coca-Cola Consolidated is 1.11 times more volatile than United Breweries Co. It trades about 0.13 of its potential returns per unit of risk. United Breweries Co is currently generating about 0.0 per unit of risk. If you would invest 89,763 in Coca Cola Consolidated on September 2, 2024 and sell it today you would earn a total of 33,237 from holding Coca Cola Consolidated or generate 37.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Coca Cola Consolidated vs. United Breweries Co
Performance |
| Timeline |
| Coca Cola Consolidated |
| United Breweries |
Coca-Cola Consolidated and United Breweries Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Coca-Cola Consolidated and United Breweries
The main advantage of trading using opposite Coca-Cola Consolidated and United Breweries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Coca-Cola Consolidated 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.| Coca-Cola Consolidated vs. DiamondRock Hospitality | Coca-Cola Consolidated vs. YOOMA WELLNESS INC | Coca-Cola Consolidated vs. CVS Health | Coca-Cola Consolidated vs. Astral Foods Limited |
| United Breweries vs. Virtus Investment Partners | United Breweries vs. Insurance Australia Group | United Breweries vs. REGAL ASIAN INVESTMENTS | United Breweries vs. AOYAMA TRADING |
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 CEOs Directory module to screen CEOs from public companies around the world.
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