Correlation Between United Breweries and Hemisphere Energy
Can any of the company-specific risk be diversified away by investing in both United Breweries and Hemisphere Energy 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 Hemisphere Energy 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 Hemisphere Energy Corp, you can compare the effects of market volatilities on United Breweries and Hemisphere Energy 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 Hemisphere Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Breweries and Hemisphere Energy.
Diversification Opportunities for United Breweries and Hemisphere Energy
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between United and Hemisphere is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding United Breweries Co and Hemisphere Energy Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hemisphere Energy Corp 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 Hemisphere Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hemisphere Energy Corp has no effect on the direction of United Breweries i.e., United Breweries and Hemisphere Energy go up and down completely randomly.
Pair Corralation between United Breweries and Hemisphere Energy
Assuming the 90 days trading horizon United Breweries is expected to generate 6.74 times less return on investment than Hemisphere Energy. But when comparing it to its historical volatility, United Breweries Co is 1.05 times less risky than Hemisphere Energy. It trades about 0.01 of its potential returns per unit of risk. Hemisphere Energy Corp is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 66.00 in Hemisphere Energy Corp on September 3, 2024 and sell it today you would earn a total of 58.00 from holding Hemisphere Energy Corp or generate 87.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
United Breweries Co vs. Hemisphere Energy Corp
Performance |
| Timeline |
| United Breweries |
| Hemisphere Energy Corp |
United Breweries and Hemisphere Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United Breweries and Hemisphere Energy
The main advantage of trading using opposite United Breweries and Hemisphere Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Breweries position performs unexpectedly, Hemisphere Energy 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 Hemisphere Energy will offset losses from the drop in Hemisphere Energy's long position.| United Breweries vs. Apple Inc | United Breweries vs. Apple Inc | United Breweries vs. Apple Inc | United Breweries vs. Apple Inc |
| Hemisphere Energy vs. United Breweries Co | Hemisphere Energy vs. JAPAN TOBACCO UNSPADR12 | Hemisphere Energy vs. INDOFOOD AGRI RES | Hemisphere Energy vs. BRIT AMER TOBACCO |
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.
Other Complementary Tools
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance |