Correlation Between United Breweries and SP Global
Can any of the company-specific risk be diversified away by investing in both United Breweries and SP Global 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 SP Global 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 SP Global, you can compare the effects of market volatilities on United Breweries and SP Global 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 SP Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Breweries and SP Global.
Diversification Opportunities for United Breweries and SP Global
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between United and MHL is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding United Breweries Co and SP Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SP Global 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 SP Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SP Global has no effect on the direction of United Breweries i.e., United Breweries and SP Global go up and down completely randomly.
Pair Corralation between United Breweries and SP Global
Assuming the 90 days trading horizon United Breweries Co is expected to generate 1.76 times more return on investment than SP Global. However, United Breweries is 1.76 times more volatile than SP Global. It trades about 0.09 of its potential returns per unit of risk. SP Global is currently generating about -0.07 per unit of risk. If you would invest 1,090 in United Breweries Co on October 17, 2024 and sell it today you would earn a total of 30.00 from holding United Breweries Co or generate 2.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
United Breweries Co vs. SP Global
Performance |
| Timeline |
| United Breweries |
| SP Global |
United Breweries and SP Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United Breweries and SP Global
The main advantage of trading using opposite United Breweries and SP Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Breweries position performs unexpectedly, SP Global 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 SP Global will offset losses from the drop in SP Global'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 |
| SP Global vs. United Breweries Co | SP Global vs. Renesas Electronics | SP Global vs. THAI BEVERAGE | SP Global vs. KIMBALL ELECTRONICS |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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