Correlation Between United Breweries and DELTA AIR
Can any of the company-specific risk be diversified away by investing in both United Breweries and DELTA AIR 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 DELTA AIR 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 DELTA AIR LINES, you can compare the effects of market volatilities on United Breweries and DELTA AIR 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 DELTA AIR. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Breweries and DELTA AIR.
Diversification Opportunities for United Breweries and DELTA AIR
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between United and DELTA is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding United Breweries Co and DELTA AIR LINES in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DELTA AIR LINES 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 DELTA AIR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DELTA AIR LINES has no effect on the direction of United Breweries i.e., United Breweries and DELTA AIR go up and down completely randomly.
Pair Corralation between United Breweries and DELTA AIR
Assuming the 90 days trading horizon United Breweries Co is expected to generate 0.88 times more return on investment than DELTA AIR. However, United Breweries Co is 1.13 times less risky than DELTA AIR. It trades about 0.33 of its potential returns per unit of risk. DELTA AIR LINES is currently generating about -0.12 per unit of risk. If you would invest 995.00 in United Breweries Co on September 22, 2024 and sell it today you would earn a total of 105.00 from holding United Breweries Co or generate 10.55% 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. DELTA AIR LINES
Performance |
| Timeline |
| United Breweries |
| DELTA AIR LINES |
United Breweries and DELTA AIR Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United Breweries and DELTA AIR
The main advantage of trading using opposite United Breweries and DELTA AIR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Breweries position performs unexpectedly, DELTA AIR 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 DELTA AIR will offset losses from the drop in DELTA AIR's long position.| United Breweries vs. UNITED UTILITIES GR | United Breweries vs. Selective Insurance Group | United Breweries vs. United Utilities Group | United Breweries vs. JJ SNACK FOODS |
| DELTA AIR vs. CDL INVESTMENT | DELTA AIR vs. Postal Savings Bank | DELTA AIR vs. INTER CARS SA | DELTA AIR vs. SEI INVESTMENTS |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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