Correlation Between Astar and San Miguel

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

By analyzing existing cross correlation between Astar and San Miguel Pure, you can compare the effects of market volatilities on Astar 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 Astar with a short position of San Miguel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Astar and San Miguel.

Diversification Opportunities for Astar and San Miguel

0.35

Correlation Coefficient

Astar  San Miguel

Weak diversification

The 3 months correlation between Astar and San is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Astar and San Miguel Pure in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on San Miguel Pure and Astar 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 Astar 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 Pure has no effect on the direction of Astar i.e., Astar and San Miguel go up and down completely randomly.

Pair Corralation between Astar and San Miguel

Assuming the 90 days trading horizon Astar is expected to under-perform the San Miguel. In addition to that, Astar is 6.55 times more volatile than San Miguel Pure. It trades about -0.1 of its total potential returns per unit of risk. San Miguel Pure is currently generating about -0.3 per unit of volatility. If you would invest  5,290  in San Miguel Pure on October 26, 2024 and sell it today you would lose (200.00) from holding San Miguel Pure or give up 3.78% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	85.71%
Values	Daily Returns

Astar  vs.  San Miguel Pure

Astar

Risk-Adjusted Performance

0 of 100

Weak

Over the last 90 days Astar has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound fundamental indicators, Astar is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

San Miguel Pure

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days San Miguel Pure has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, San Miguel is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Astar and San Miguel

The main advantage of trading using opposite Astar and San Miguel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Astar 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 Astar and San Miguel Pure 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.