Correlation Between United Breweries and J+J SNACK
Can any of the company-specific risk be diversified away by investing in both United Breweries and J+J SNACK 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 J+J SNACK 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 JJ SNACK FOODS, you can compare the effects of market volatilities on United Breweries and J+J SNACK 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 J+J SNACK. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Breweries and J+J SNACK.
Diversification Opportunities for United Breweries and J+J SNACK
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between United and J+J is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding United Breweries Co and JJ SNACK FOODS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JJ SNACK FOODS 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 J+J SNACK. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JJ SNACK FOODS has no effect on the direction of United Breweries i.e., United Breweries and J+J SNACK go up and down completely randomly.
Pair Corralation between United Breweries and J+J SNACK
Assuming the 90 days trading horizon United Breweries Co is expected to generate 1.64 times more return on investment than J+J SNACK. However, United Breweries is 1.64 times more volatile than JJ SNACK FOODS. It trades about 0.17 of its potential returns per unit of risk. JJ SNACK FOODS is currently generating about 0.14 per unit of risk. If you would invest 976.00 in United Breweries Co on September 13, 2024 and sell it today you would earn a total of 114.00 from holding United Breweries Co or generate 11.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 97.73% |
| Values | Daily Returns |
United Breweries Co vs. JJ SNACK FOODS
Performance |
| Timeline |
| United Breweries |
| JJ SNACK FOODS |
United Breweries and J+J SNACK Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United Breweries and J+J SNACK
The main advantage of trading using opposite United Breweries and J+J SNACK positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Breweries position performs unexpectedly, J+J SNACK 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 J+J SNACK will offset losses from the drop in J+J SNACK's long position.| United Breweries vs. Apple Inc | United Breweries vs. Apple Inc | United Breweries vs. Apple Inc | United Breweries vs. Apple Inc |
| J+J SNACK vs. Hormel Foods | J+J SNACK vs. Superior Plus Corp | J+J SNACK vs. SIVERS SEMICONDUCTORS AB | J+J SNACK vs. NorAm Drilling AS |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
Other Complementary Tools
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum |