Correlation Between United Breweries and Synovus Financial
Can any of the company-specific risk be diversified away by investing in both United Breweries and Synovus Financial 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 Synovus Financial 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 Synovus Financial Corp, you can compare the effects of market volatilities on United Breweries and Synovus Financial 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 Synovus Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Breweries and Synovus Financial.
Diversification Opportunities for United Breweries and Synovus Financial
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between United and Synovus is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding United Breweries Co and Synovus Financial Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Synovus Financial 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 Synovus Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Synovus Financial Corp has no effect on the direction of United Breweries i.e., United Breweries and Synovus Financial go up and down completely randomly.
Pair Corralation between United Breweries and Synovus Financial
Assuming the 90 days trading horizon United Breweries Co is expected to generate 0.85 times more return on investment than Synovus Financial. However, United Breweries Co is 1.18 times less risky than Synovus Financial. It trades about 0.09 of its potential returns per unit of risk. Synovus Financial Corp is currently generating about -0.04 per unit of risk. If you would invest 1,060 in United Breweries Co on October 30, 2024 and sell it today you would earn a total of 50.00 from holding United Breweries Co or generate 4.72% 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. Synovus Financial Corp
Performance |
| Timeline |
| United Breweries |
| Synovus Financial Corp |
United Breweries and Synovus Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United Breweries and Synovus Financial
The main advantage of trading using opposite United Breweries and Synovus Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Breweries position performs unexpectedly, Synovus Financial 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 Synovus Financial will offset losses from the drop in Synovus Financial's long position.| United Breweries vs. BORR DRILLING NEW | United Breweries vs. Fortescue Metals Group | United Breweries vs. ADRIATIC METALS LS 013355 | United Breweries vs. Air Transport Services |
| Synovus Financial vs. Apple Inc | Synovus Financial vs. Apple Inc | Synovus Financial vs. Apple Inc | Synovus Financial 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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