Correlation Between 24SEVENOFFICE GROUP and SAN MIGUEL

Can any of the company-specific risk be diversified away by investing in both 24SEVENOFFICE GROUP and SAN MIGUEL 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 24SEVENOFFICE GROUP and SAN MIGUEL into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between 24SEVENOFFICE GROUP AB and SAN MIGUEL BREWERY, you can compare the effects of market volatilities on 24SEVENOFFICE GROUP and SAN MIGUEL 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 24SEVENOFFICE GROUP with a short position of SAN MIGUEL. Check out your portfolio center. Please also check ongoing floating volatility patterns of 24SEVENOFFICE GROUP and SAN MIGUEL.

Diversification Opportunities for 24SEVENOFFICE GROUP and SAN MIGUEL

-0.5

Correlation Coefficient

24SEVENOFFICE GROUP  SAN MIGUEL

Very good diversification

The 3 months correlation between 24SEVENOFFICE and SAN is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding 24SEVENOFFICE GROUP AB and SAN MIGUEL BREWERY in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SAN MIGUEL BREWERY and 24SEVENOFFICE GROUP 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 24SEVENOFFICE GROUP AB are associated (or correlated) with SAN MIGUEL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SAN MIGUEL BREWERY has no effect on the direction of 24SEVENOFFICE GROUP i.e., 24SEVENOFFICE GROUP and SAN MIGUEL go up and down completely randomly.

Pair Corralation between 24SEVENOFFICE GROUP and SAN MIGUEL

Assuming the 90 days horizon 24SEVENOFFICE GROUP AB is expected to generate 0.69 times more return on investment than SAN MIGUEL. However, 24SEVENOFFICE GROUP AB is 1.45 times less risky than SAN MIGUEL. It trades about 0.1 of its potential returns per unit of risk. SAN MIGUEL BREWERY is currently generating about 0.04 per unit of risk. If you would invest  39.00  in 24SEVENOFFICE GROUP AB on October 11, 2024 and sell it today you would earn a total of  170.00  from holding 24SEVENOFFICE GROUP AB or generate 435.9% return on investment over 90 days.

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

24SEVENOFFICE GROUP AB  vs.  SAN MIGUEL BREWERY

24SEVENOFFICE GROUP

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in 24SEVENOFFICE GROUP AB are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, 24SEVENOFFICE GROUP reported solid returns over the last few months and may actually be approaching a breakup point.

SAN MIGUEL BREWERY

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days SAN MIGUEL BREWERY has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain rather sound which may send shares a bit higher in February 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with 24SEVENOFFICE GROUP and SAN MIGUEL

The main advantage of trading using opposite 24SEVENOFFICE GROUP and SAN MIGUEL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 24SEVENOFFICE GROUP position performs unexpectedly, SAN MIGUEL 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 SAN MIGUEL will offset losses from the drop in SAN MIGUEL's long position.

The idea behind 24SEVENOFFICE GROUP AB and SAN MIGUEL BREWERY 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.