Correlation Between UNION HOMES and INTERNATIONAL BREWERIES

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

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

Diversification Opportunities for UNION HOMES and INTERNATIONAL BREWERIES

0.0

Correlation Coefficient

UNION HOMES  INTERNATIONAL BREWERIES

Pay attention - limited upside

The 3 months correlation between UNION and INTERNATIONAL is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding UNION HOMES REAL and INTERNATIONAL BREWERIES PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on INTERNATIONAL BREWERIES and UNION HOMES 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 UNION HOMES REAL are associated (or correlated) with INTERNATIONAL BREWERIES. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of INTERNATIONAL BREWERIES has no effect on the direction of UNION HOMES i.e., UNION HOMES and INTERNATIONAL BREWERIES go up and down completely randomly.

Pair Corralation between UNION HOMES and INTERNATIONAL BREWERIES

If you would invest  379.00  in INTERNATIONAL BREWERIES PLC on October 10, 2024 and sell it today you would earn a total of  146.00  from holding INTERNATIONAL BREWERIES PLC or generate 38.52% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

UNION HOMES REAL  vs.  INTERNATIONAL BREWERIES PLC

UNION HOMES REAL

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days UNION HOMES REAL has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong forward indicators, UNION HOMES is not utilizing all of its potentials. The latest stock price confusion, may contribute to short-horizon losses for the traders.

INTERNATIONAL BREWERIES

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in INTERNATIONAL BREWERIES PLC are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unsteady technical and fundamental indicators, INTERNATIONAL BREWERIES showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with UNION HOMES and INTERNATIONAL BREWERIES

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

The idea behind UNION HOMES REAL and INTERNATIONAL BREWERIES PLC 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.