Correlation Between Cosco Capital and San Miguel

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

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

Diversification Opportunities for Cosco Capital and San Miguel

-0.37

Correlation Coefficient

Cosco Capital  San Miguel

Very good diversification

The 3 months correlation between Cosco and San is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Cosco Capital 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 Cosco Capital 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 Cosco Capital 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 Cosco Capital i.e., Cosco Capital and San Miguel go up and down completely randomly.

Pair Corralation between Cosco Capital and San Miguel

Assuming the 90 days trading horizon Cosco Capital is expected to under-perform the San Miguel. But the stock apears to be less risky and, when comparing its historical volatility, Cosco Capital is 1.26 times less risky than San Miguel. The stock trades about -0.04 of its potential returns per unit of risk. The San Miguel Pure is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest  5,223  in San Miguel Pure on October 26, 2024 and sell it today you would lose (133.00) from holding San Miguel Pure or give up 2.55% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.31%
Values	Daily Returns

Cosco Capital  vs.  San Miguel Pure

Cosco Capital

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Cosco Capital has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Cosco Capital is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

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 Cosco Capital and San Miguel

The main advantage of trading using opposite Cosco Capital and San Miguel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cosco Capital 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 Cosco Capital 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.