Correlation Between FARM 51 and United Breweries
Can any of the company-specific risk be diversified away by investing in both FARM 51 and United Breweries 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 FARM 51 and United Breweries into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FARM 51 GROUP and United Breweries Co, you can compare the effects of market volatilities on FARM 51 and United Breweries 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 FARM 51 with a short position of United Breweries. Check out your portfolio center. Please also check ongoing floating volatility patterns of FARM 51 and United Breweries.
Diversification Opportunities for FARM 51 and United Breweries
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between FARM and United is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding FARM 51 GROUP and United Breweries Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on United Breweries and FARM 51 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 FARM 51 GROUP are associated (or correlated) with United Breweries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of United Breweries has no effect on the direction of FARM 51 i.e., FARM 51 and United Breweries go up and down completely randomly.
Pair Corralation between FARM 51 and United Breweries
Assuming the 90 days horizon FARM 51 GROUP is expected to generate 1.9 times more return on investment than United Breweries. However, FARM 51 is 1.9 times more volatile than United Breweries Co. It trades about 0.19 of its potential returns per unit of risk. United Breweries Co is currently generating about 0.2 per unit of risk. If you would invest 290.00 in FARM 51 GROUP on November 7, 2024 and sell it today you would earn a total of 36.00 from holding FARM 51 GROUP or generate 12.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
FARM 51 GROUP vs. United Breweries Co
Performance |
| Timeline |
| FARM 51 GROUP |
| United Breweries |
FARM 51 and United Breweries Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FARM 51 and United Breweries
The main advantage of trading using opposite FARM 51 and United Breweries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FARM 51 position performs unexpectedly, United Breweries 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 United Breweries will offset losses from the drop in United Breweries' long position.| FARM 51 vs. Suntory Beverage Food | FARM 51 vs. United Breweries Co | FARM 51 vs. International Consolidated Airlines | FARM 51 vs. United Airlines Holdings |
| United Breweries vs. REMEDY ENTERTAINMENT OYJ | United Breweries vs. Merit Medical Systems | United Breweries vs. MEDICAL FACILITIES NEW | United Breweries vs. PROSIEBENSAT1 MEDIADR4 |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
Other Complementary Tools
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories |