Correlation Between United Breweries and Canon Marketing
Can any of the company-specific risk be diversified away by investing in both United Breweries and Canon Marketing 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 Canon Marketing 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 Canon Marketing Japan, you can compare the effects of market volatilities on United Breweries and Canon Marketing 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 Canon Marketing. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Breweries and Canon Marketing.
Diversification Opportunities for United Breweries and Canon Marketing
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between United and Canon is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding United Breweries Co and Canon Marketing Japan in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Canon Marketing Japan 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 Canon Marketing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Canon Marketing Japan has no effect on the direction of United Breweries i.e., United Breweries and Canon Marketing go up and down completely randomly.
Pair Corralation between United Breweries and Canon Marketing
Assuming the 90 days trading horizon United Breweries is expected to generate 1.82 times less return on investment than Canon Marketing. In addition to that, United Breweries is 1.03 times more volatile than Canon Marketing Japan. It trades about 0.04 of its total potential returns per unit of risk. Canon Marketing Japan is currently generating about 0.07 per unit of volatility. If you would invest 2,560 in Canon Marketing Japan on October 17, 2024 and sell it today you would earn a total of 460.00 from holding Canon Marketing Japan or generate 17.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.32% |
| Values | Daily Returns |
United Breweries Co vs. Canon Marketing Japan
Performance |
| Timeline |
| United Breweries |
| Canon Marketing Japan |
United Breweries and Canon Marketing Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United Breweries and Canon Marketing
The main advantage of trading using opposite United Breweries and Canon Marketing positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Breweries position performs unexpectedly, Canon Marketing 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 Canon Marketing will offset losses from the drop in Canon Marketing's long position.| United Breweries vs. Northern Data AG | United Breweries vs. ADDUS HOMECARE | United Breweries vs. KENEDIX OFFICE INV | United Breweries vs. DATATEC LTD 2 |
| Canon Marketing vs. NTT DATA | Canon Marketing vs. Pure Storage | Canon Marketing vs. United Breweries Co | Canon Marketing vs. Northern Data AG |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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