Correlation Between United Breweries and STRAYER EDUCATION
Can any of the company-specific risk be diversified away by investing in both United Breweries and STRAYER EDUCATION 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 STRAYER EDUCATION 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 STRAYER EDUCATION, you can compare the effects of market volatilities on United Breweries and STRAYER EDUCATION 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 STRAYER EDUCATION. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Breweries and STRAYER EDUCATION.
Diversification Opportunities for United Breweries and STRAYER EDUCATION
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between United and STRAYER is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding United Breweries Co and STRAYER EDUCATION in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on STRAYER EDUCATION 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 STRAYER EDUCATION. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of STRAYER EDUCATION has no effect on the direction of United Breweries i.e., United Breweries and STRAYER EDUCATION go up and down completely randomly.
Pair Corralation between United Breweries and STRAYER EDUCATION
Assuming the 90 days trading horizon United Breweries is expected to generate 1.52 times less return on investment than STRAYER EDUCATION. But when comparing it to its historical volatility, United Breweries Co is 1.35 times less risky than STRAYER EDUCATION. It trades about 0.02 of its potential returns per unit of risk. STRAYER EDUCATION is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 8,531 in STRAYER EDUCATION on October 29, 2024 and sell it today you would earn a total of 719.00 from holding STRAYER EDUCATION or generate 8.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
United Breweries Co vs. STRAYER EDUCATION
Performance |
| Timeline |
| United Breweries |
| STRAYER EDUCATION |
United Breweries and STRAYER EDUCATION Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United Breweries and STRAYER EDUCATION
The main advantage of trading using opposite United Breweries and STRAYER EDUCATION positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Breweries position performs unexpectedly, STRAYER EDUCATION 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 STRAYER EDUCATION will offset losses from the drop in STRAYER EDUCATION's long position.| United Breweries vs. TITAN MACHINERY | United Breweries vs. MAGIC SOFTWARE ENTR | United Breweries vs. Sterling Construction | United Breweries vs. FARM 51 GROUP |
| STRAYER EDUCATION vs. Apple Inc | STRAYER EDUCATION vs. Apple Inc | STRAYER EDUCATION vs. Apple Inc | STRAYER EDUCATION vs. Apple Inc |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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