Correlation Between Concepcion Industrial and San Miguel

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

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

Diversification Opportunities for Concepcion Industrial and San Miguel

0.28

Correlation Coefficient

Concepcion Industrial  San Miguel

Modest diversification

The 3 months correlation between Concepcion and San is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Concepcion Industrial Corp 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 Concepcion Industrial 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 Concepcion Industrial Corp 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 Concepcion Industrial i.e., Concepcion Industrial and San Miguel go up and down completely randomly.

Pair Corralation between Concepcion Industrial and San Miguel

Assuming the 90 days trading horizon Concepcion Industrial Corp is expected to generate 1.02 times more return on investment than San Miguel. However, Concepcion Industrial is 1.02 times more volatile than San Miguel Pure. It trades about 0.07 of its potential returns per unit of risk. San Miguel Pure is currently generating about -0.02 per unit of risk. If you would invest  1,338  in Concepcion Industrial Corp on December 22, 2024 and sell it today you would earn a total of  76.00  from holding Concepcion Industrial Corp or generate 5.68% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	91.53%
Values	Daily Returns

Concepcion Industrial Corp  vs.  San Miguel Pure

Concepcion Industrial

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Concepcion Industrial Corp are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak technical and fundamental indicators, Concepcion Industrial may actually be approaching a critical reversion point that can send shares even higher in April 2025.

San Miguel Pure

Risk-Adjusted Performance

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 current stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Concepcion Industrial and San Miguel

The main advantage of trading using opposite Concepcion Industrial and San Miguel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Concepcion Industrial 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 Concepcion Industrial Corp 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.