Correlation Between United Breweries and TOWNSQUARE MEDIA
Can any of the company-specific risk be diversified away by investing in both United Breweries and TOWNSQUARE MEDIA 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 TOWNSQUARE MEDIA 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 TOWNSQUARE MEDIA INC, you can compare the effects of market volatilities on United Breweries and TOWNSQUARE MEDIA 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 TOWNSQUARE MEDIA. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Breweries and TOWNSQUARE MEDIA.
Diversification Opportunities for United Breweries and TOWNSQUARE MEDIA
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between United and TOWNSQUARE is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding United Breweries Co and TOWNSQUARE MEDIA INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TOWNSQUARE MEDIA INC 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 TOWNSQUARE MEDIA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TOWNSQUARE MEDIA INC has no effect on the direction of United Breweries i.e., United Breweries and TOWNSQUARE MEDIA go up and down completely randomly.
Pair Corralation between United Breweries and TOWNSQUARE MEDIA
Assuming the 90 days trading horizon United Breweries Co is expected to generate 0.96 times more return on investment than TOWNSQUARE MEDIA. However, United Breweries Co is 1.04 times less risky than TOWNSQUARE MEDIA. It trades about 0.06 of its potential returns per unit of risk. TOWNSQUARE MEDIA INC is currently generating about 0.01 per unit of risk. If you would invest 1,005 in United Breweries Co on August 29, 2024 and sell it today you would earn a total of 35.00 from holding United Breweries Co or generate 3.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
United Breweries Co vs. TOWNSQUARE MEDIA INC
Performance |
| Timeline |
| United Breweries |
| TOWNSQUARE MEDIA INC |
United Breweries and TOWNSQUARE MEDIA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United Breweries and TOWNSQUARE MEDIA
The main advantage of trading using opposite United Breweries and TOWNSQUARE MEDIA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Breweries position performs unexpectedly, TOWNSQUARE MEDIA 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 TOWNSQUARE MEDIA will offset losses from the drop in TOWNSQUARE MEDIA's long position.| United Breweries vs. Apple Inc | United Breweries vs. Apple Inc | United Breweries vs. Apple Inc | United Breweries vs. Apple Inc |
| TOWNSQUARE MEDIA vs. Calibre Mining Corp | TOWNSQUARE MEDIA vs. COLUMBIA SPORTSWEAR | TOWNSQUARE MEDIA vs. LG Display Co | TOWNSQUARE MEDIA vs. PLAYTIKA HOLDING DL 01 |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
Other Complementary Tools
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas |