Correlation Between INTERNATIONAL BREWERIES and C I

Can any of the company-specific risk be diversified away by investing in both INTERNATIONAL BREWERIES and C I 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 INTERNATIONAL BREWERIES and C I into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between INTERNATIONAL BREWERIES PLC and C I LEASING, you can compare the effects of market volatilities on INTERNATIONAL BREWERIES and C I 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 INTERNATIONAL BREWERIES with a short position of C I. Check out your portfolio center. Please also check ongoing floating volatility patterns of INTERNATIONAL BREWERIES and C I.

Diversification Opportunities for INTERNATIONAL BREWERIES and C I

0.45

Correlation Coefficient

INTERNATIONAL BREWERIES  C I

Very weak diversification

The 3 months correlation between INTERNATIONAL and CILEASING is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding INTERNATIONAL BREWERIES PLC and C I LEASING in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on C I LEASING and INTERNATIONAL 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 INTERNATIONAL BREWERIES PLC are associated (or correlated) with C I. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of C I LEASING has no effect on the direction of INTERNATIONAL BREWERIES i.e., INTERNATIONAL BREWERIES and C I go up and down completely randomly.

Pair Corralation between INTERNATIONAL BREWERIES and C I

Assuming the 90 days trading horizon INTERNATIONAL BREWERIES PLC is expected to generate 0.91 times more return on investment than C I. However, INTERNATIONAL BREWERIES PLC is 1.09 times less risky than C I. It trades about 0.04 of its potential returns per unit of risk. C I LEASING is currently generating about 0.03 per unit of risk. If you would invest  375.00  in INTERNATIONAL BREWERIES PLC on October 21, 2024 and sell it today you would earn a total of  165.00  from holding INTERNATIONAL BREWERIES PLC or generate 44.0% return on investment over 90 days.

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

INTERNATIONAL BREWERIES PLC  vs.  C I LEASING

INTERNATIONAL BREWERIES

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in INTERNATIONAL BREWERIES PLC are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unfluctuating technical and fundamental indicators, INTERNATIONAL BREWERIES showed solid returns over the last few months and may actually be approaching a breakup point.

C I LEASING

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in C I LEASING are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite fairly unsteady basic indicators, C I demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with INTERNATIONAL BREWERIES and C I

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

The idea behind INTERNATIONAL BREWERIES PLC and C I LEASING 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.