Correlation Between SP Global and United Breweries
Can any of the company-specific risk be diversified away by investing in both SP Global 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 SP Global and United Breweries into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SP Global and United Breweries Co, you can compare the effects of market volatilities on SP Global 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 SP Global with a short position of United Breweries. Check out your portfolio center. Please also check ongoing floating volatility patterns of SP Global and United Breweries.
Diversification Opportunities for SP Global and United Breweries
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between MHL and United is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding SP Global and United Breweries Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on United Breweries and SP Global 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 SP Global 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 SP Global i.e., SP Global and United Breweries go up and down completely randomly.
Pair Corralation between SP Global and United Breweries
Assuming the 90 days horizon SP Global is expected to under-perform the United Breweries. But the stock apears to be less risky and, when comparing its historical volatility, SP Global is 1.72 times less risky than United Breweries. The stock trades about -0.11 of its potential returns per unit of risk. The United Breweries Co is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 1,090 in United Breweries Co on October 17, 2024 and sell it today you would earn a total of 20.00 from holding United Breweries Co or generate 1.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 94.44% |
| Values | Daily Returns |
SP Global vs. United Breweries Co
Performance |
| Timeline |
| SP Global |
| United Breweries |
SP Global and United Breweries Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SP Global and United Breweries
The main advantage of trading using opposite SP Global and United Breweries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SP Global 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.| SP Global vs. United Breweries Co | SP Global vs. Renesas Electronics | SP Global vs. THAI BEVERAGE | SP Global vs. KIMBALL ELECTRONICS |
| United Breweries vs. Northern Data AG | United Breweries vs. ADDUS HOMECARE | United Breweries vs. KENEDIX OFFICE INV | United Breweries vs. DATATEC LTD 2 |
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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