Correlation Between United Breweries and Bilfinger
Can any of the company-specific risk be diversified away by investing in both United Breweries and Bilfinger 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 Bilfinger 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 Bilfinger SE, you can compare the effects of market volatilities on United Breweries and Bilfinger 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 Bilfinger. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Breweries and Bilfinger.
Diversification Opportunities for United Breweries and Bilfinger
-0.24 | Correlation Coefficient |
Very good diversification
The 3 months correlation between United and Bilfinger is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding United Breweries Co and Bilfinger SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bilfinger SE 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 Bilfinger. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bilfinger SE has no effect on the direction of United Breweries i.e., United Breweries and Bilfinger go up and down completely randomly.
Pair Corralation between United Breweries and Bilfinger
Assuming the 90 days trading horizon United Breweries Co is expected to generate 0.69 times more return on investment than Bilfinger. However, United Breweries Co is 1.46 times less risky than Bilfinger. It trades about 0.37 of its potential returns per unit of risk. Bilfinger SE is currently generating about 0.07 per unit of risk. If you would invest 986.00 in United Breweries Co on September 12, 2024 and sell it today you would earn a total of 104.00 from holding United Breweries Co or generate 10.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
United Breweries Co vs. Bilfinger SE
Performance |
| Timeline |
| United Breweries |
| Bilfinger SE |
United Breweries and Bilfinger Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United Breweries and Bilfinger
The main advantage of trading using opposite United Breweries and Bilfinger positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Breweries position performs unexpectedly, Bilfinger 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 Bilfinger will offset losses from the drop in Bilfinger's long position.| United Breweries vs. Apple Inc | United Breweries vs. Apple Inc | United Breweries vs. Apple Inc | United Breweries vs. Apple Inc |
| Bilfinger vs. BOSTON BEER A | Bilfinger vs. United Breweries Co | Bilfinger vs. MagnaChip Semiconductor Corp | Bilfinger vs. Westinghouse Air Brake |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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