Correlation Between China Resources and United Breweries
Can any of the company-specific risk be diversified away by investing in both China Resources 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 Resources 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 Resources Beer and United Breweries Co, you can compare the effects of market volatilities on China Resources 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 Resources with a short position of United Breweries. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Resources and United Breweries.
Diversification Opportunities for China Resources and United Breweries
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between China and United is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding China Resources Beer 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 Resources 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 Resources Beer 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 Resources i.e., China Resources and United Breweries go up and down completely randomly.
Pair Corralation between China Resources and United Breweries
Assuming the 90 days horizon China Resources Beer is expected to under-perform the United Breweries. In addition to that, China Resources is 1.6 times more volatile than United Breweries Co. It trades about -0.01 of its total potential returns per unit of risk. United Breweries Co is currently generating about 0.01 per unit of volatility. If you would invest 1,033 in United Breweries Co on August 29, 2024 and sell it today you would earn a total of 7.00 from holding United Breweries Co or generate 0.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
China Resources Beer vs. United Breweries Co
Performance |
| Timeline |
| China Resources Beer |
| United Breweries |
China Resources and United Breweries Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Resources and United Breweries
The main advantage of trading using opposite China Resources and United Breweries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Resources 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 Resources vs. Molson Coors Brewing | China Resources vs. MOLSON RS BEVERAGE | China Resources vs. Superior Plus Corp | China Resources vs. SIVERS SEMICONDUCTORS AB |
| United Breweries vs. Apple Inc | United Breweries vs. Apple Inc | United Breweries vs. Apple Inc | United Breweries vs. Apple Inc |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
Other Complementary Tools
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance |