Correlation Between United Breweries and QUEEN S
Can any of the company-specific risk be diversified away by investing in both United Breweries and QUEEN S 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 QUEEN S 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 QUEEN S ROAD, you can compare the effects of market volatilities on United Breweries and QUEEN S 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 QUEEN S. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Breweries and QUEEN S.
Diversification Opportunities for United Breweries and QUEEN S
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between United and QUEEN is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding United Breweries Co and QUEEN S ROAD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on QUEEN S ROAD 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 QUEEN S. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of QUEEN S ROAD has no effect on the direction of United Breweries i.e., United Breweries and QUEEN S go up and down completely randomly.
Pair Corralation between United Breweries and QUEEN S
Assuming the 90 days trading horizon United Breweries Co is expected to generate 0.2 times more return on investment than QUEEN S. However, United Breweries Co is 4.92 times less risky than QUEEN S. It trades about 0.49 of its potential returns per unit of risk. QUEEN S ROAD is currently generating about 0.06 per unit of risk. If you would invest 966.00 in United Breweries Co on September 13, 2024 and sell it today you would earn a total of 124.00 from holding United Breweries Co or generate 12.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
United Breweries Co vs. QUEEN S ROAD
Performance |
| Timeline |
| United Breweries |
| QUEEN S ROAD |
United Breweries and QUEEN S Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United Breweries and QUEEN S
The main advantage of trading using opposite United Breweries and QUEEN S positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Breweries position performs unexpectedly, QUEEN S 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 QUEEN S will offset losses from the drop in QUEEN S's long position.| United Breweries vs. National Retail Properties | United Breweries vs. EBRO FOODS | United Breweries vs. Cal Maine Foods | United Breweries vs. MARKET VECTR RETAIL |
| QUEEN S vs. Ameriprise Financial | QUEEN S vs. Ares Management Corp | QUEEN S vs. Superior Plus Corp | QUEEN S vs. SIVERS SEMICONDUCTORS AB |
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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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