Correlation Between United Breweries and Japan Asia
Can any of the company-specific risk be diversified away by investing in both United Breweries and Japan Asia 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 Japan Asia 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 Japan Asia Investment, you can compare the effects of market volatilities on United Breweries and Japan Asia 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 Japan Asia. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Breweries and Japan Asia.
Diversification Opportunities for United Breweries and Japan Asia
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between United and Japan is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding United Breweries Co and Japan Asia Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Japan Asia Investment 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 Japan Asia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Japan Asia Investment has no effect on the direction of United Breweries i.e., United Breweries and Japan Asia go up and down completely randomly.
Pair Corralation between United Breweries and Japan Asia
Assuming the 90 days trading horizon United Breweries Co is expected to generate 1.31 times more return on investment than Japan Asia. However, United Breweries is 1.31 times more volatile than Japan Asia Investment. It trades about 0.13 of its potential returns per unit of risk. Japan Asia Investment is currently generating about 0.01 per unit of risk. If you would invest 1,080 in United Breweries Co on October 25, 2024 and sell it today you would earn a total of 40.00 from holding United Breweries Co or generate 3.7% 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. Japan Asia Investment
Performance |
| Timeline |
| United Breweries |
| Japan Asia Investment |
United Breweries and Japan Asia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United Breweries and Japan Asia
The main advantage of trading using opposite United Breweries and Japan Asia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Breweries position performs unexpectedly, Japan Asia 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 Japan Asia will offset losses from the drop in Japan Asia's long position.| United Breweries vs. Wizz Air Holdings | United Breweries vs. PURETECH HEALTH PLC | United Breweries vs. Pentair plc | United Breweries vs. National Health Investors |
| Japan Asia vs. CompuGroup Medical SE | Japan Asia vs. Scientific Games | Japan Asia vs. Diamyd Medical AB | Japan Asia vs. PENN NATL GAMING |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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