Correlation Between United Breweries and Columbia Sportswear
Can any of the company-specific risk be diversified away by investing in both United Breweries and Columbia Sportswear 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 Columbia Sportswear 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 Columbia Sportswear, you can compare the effects of market volatilities on United Breweries and Columbia Sportswear 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 Columbia Sportswear. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Breweries and Columbia Sportswear.
Diversification Opportunities for United Breweries and Columbia Sportswear
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between United and Columbia is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding United Breweries Co and Columbia Sportswear in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Columbia Sportswear 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 Columbia Sportswear. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Columbia Sportswear has no effect on the direction of United Breweries i.e., United Breweries and Columbia Sportswear go up and down completely randomly.
Pair Corralation between United Breweries and Columbia Sportswear
Assuming the 90 days trading horizon United Breweries Co is expected to generate 0.67 times more return on investment than Columbia Sportswear. However, United Breweries Co is 1.48 times less risky than Columbia Sportswear. It trades about 0.34 of its potential returns per unit of risk. Columbia Sportswear is currently generating about -0.03 per unit of risk. If you would invest 1,100 in United Breweries Co on December 11, 2024 and sell it today you would earn a total of 260.00 from holding United Breweries Co or generate 23.64% 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. Columbia Sportswear
Performance |
| Timeline |
| United Breweries |
| Columbia Sportswear |
United Breweries and Columbia Sportswear Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United Breweries and Columbia Sportswear
The main advantage of trading using opposite United Breweries and Columbia Sportswear positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Breweries position performs unexpectedly, Columbia Sportswear 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 Columbia Sportswear will offset losses from the drop in Columbia Sportswear's long position.| United Breweries vs. Apple Inc | United Breweries vs. Apple Inc | United Breweries vs. Apple Inc | United Breweries vs. Apple Inc |
| Columbia Sportswear vs. PLAYMATES TOYS | Columbia Sportswear vs. National Beverage Corp | Columbia Sportswear vs. ePlay Digital | Columbia Sportswear vs. Ming Le Sports |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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