Correlation Between United Breweries and Powercell Sweden
Can any of the company-specific risk be diversified away by investing in both United Breweries and Powercell Sweden 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 United Breweries and Powercell Sweden into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between United Breweries Co and Powercell Sweden, you can compare the effects of market volatilities on United Breweries and Powercell Sweden 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 United Breweries with a short position of Powercell Sweden. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Breweries and Powercell Sweden.
Diversification Opportunities for United Breweries and Powercell Sweden
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between United and Powercell is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding United Breweries Co and Powercell Sweden in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Powercell Sweden and United Breweries 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 United Breweries Co are associated (or correlated) with Powercell Sweden. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Powercell Sweden has no effect on the direction of United Breweries i.e., United Breweries and Powercell Sweden go up and down completely randomly.
Pair Corralation between United Breweries and Powercell Sweden
Assuming the 90 days trading horizon United Breweries Co is expected to generate 0.4 times more return on investment than Powercell Sweden. However, United Breweries Co is 2.47 times less risky than Powercell Sweden. It trades about 0.01 of its potential returns per unit of risk. Powercell Sweden is currently generating about -0.15 per unit of risk. If you would invest 1,090 in United Breweries Co on October 24, 2024 and sell it today you would earn a total of 0.00 from holding United Breweries Co or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
United Breweries Co vs. Powercell Sweden
Performance |
| Timeline |
| United Breweries |
| Powercell Sweden |
United Breweries and Powercell Sweden Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United Breweries and Powercell Sweden
The main advantage of trading using opposite United Breweries and Powercell Sweden positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Breweries position performs unexpectedly, Powercell Sweden 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 Powercell Sweden will offset losses from the drop in Powercell Sweden's long position.| United Breweries vs. Tyson Foods | United Breweries vs. Gol Intelligent Airlines | United Breweries vs. United Airlines Holdings | United Breweries vs. Aegean Airlines SA |
| Powercell Sweden vs. High Liner Foods | Powercell Sweden vs. ASPEN TECHINC DL | Powercell Sweden vs. US FOODS HOLDING | Powercell Sweden vs. Cal Maine Foods |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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