Correlation Between Atlas Consolidated and San Miguel

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

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

Diversification Opportunities for Atlas Consolidated and San Miguel

-0.13

Correlation Coefficient

Atlas Consolidated  San Miguel

Good diversification

The 3 months correlation between Atlas and San is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Atlas Consolidated Mining 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 Atlas Consolidated 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 Atlas Consolidated Mining 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 Atlas Consolidated i.e., Atlas Consolidated and San Miguel go up and down completely randomly.

Pair Corralation between Atlas Consolidated and San Miguel

Assuming the 90 days trading horizon Atlas Consolidated is expected to generate 1.83 times less return on investment than San Miguel. But when comparing it to its historical volatility, Atlas Consolidated Mining is 1.03 times less risky than San Miguel. It trades about 0.04 of its potential returns per unit of risk. San Miguel Pure is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  5,150  in San Miguel Pure on September 28, 2024 and sell it today you would earn a total of  140.00  from holding San Miguel Pure or generate 2.72% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	90.48%
Values	Daily Returns

Atlas Consolidated Mining  vs.  San Miguel Pure

Atlas Consolidated Mining

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Atlas Consolidated Mining has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's basic indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm 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 newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Atlas Consolidated and San Miguel

The main advantage of trading using opposite Atlas Consolidated and San Miguel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Atlas Consolidated 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 Atlas Consolidated Mining 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.