Correlation Between United Breweries and Intel

Can any of the company-specific risk be diversified away by investing in both United Breweries and Intel 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 Intel 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 Intel, you can compare the effects of market volatilities on United Breweries and Intel 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 Intel. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Breweries and Intel.

Diversification Opportunities for United Breweries and Intel

-0.58

Correlation Coefficient

United Breweries  Intel

Excellent diversification

The 3 months correlation between United and Intel is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding United Breweries Co and Intel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intel 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 Intel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Intel has no effect on the direction of United Breweries i.e., United Breweries and Intel go up and down completely randomly.

Pair Corralation between United Breweries and Intel

Assuming the 90 days trading horizon United Breweries Co is expected to generate 0.5 times more return on investment than Intel. However, United Breweries Co is 1.99 times less risky than Intel. It trades about 0.21 of its potential returns per unit of risk. Intel is currently generating about -0.18 per unit of risk. If you would invest  995.00  in United Breweries Co on October 17, 2024 and sell it today you would earn a total of  115.00  from holding United Breweries Co or generate 11.56% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

United Breweries Co  vs.  Intel

United Breweries

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in United Breweries Co are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, United Breweries unveiled solid returns over the last few months and may actually be approaching a breakup point.

Intel

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Intel has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest fragile performance, the Stock's essential indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with United Breweries and Intel

The main advantage of trading using opposite United Breweries and Intel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Breweries position performs unexpectedly, Intel 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 Intel will offset losses from the drop in Intel's long position.

The idea behind United Breweries Co and Intel pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.