Correlation Between De Grey and SAN MIGUEL

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

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

Diversification Opportunities for De Grey and SAN MIGUEL

-0.77

Correlation Coefficient

De Grey  SAN MIGUEL

Pay attention - limited upside

The 3 months correlation between DGD and SAN is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding De Grey Mining 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 De Grey 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 De Grey 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 BREWERY has no effect on the direction of De Grey i.e., De Grey and SAN MIGUEL go up and down completely randomly.

Pair Corralation between De Grey and SAN MIGUEL

Assuming the 90 days trading horizon De Grey is expected to generate 3.6 times less return on investment than SAN MIGUEL. But when comparing it to its historical volatility, De Grey Mining is 1.97 times less risky than SAN MIGUEL. It trades about 0.03 of its potential returns per unit of risk. SAN MIGUEL BREWERY is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  4.09  in SAN MIGUEL BREWERY on October 25, 2024 and sell it today you would earn a total of  6.91  from holding SAN MIGUEL BREWERY or generate 168.95% return on investment over 90 days.

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

De Grey Mining  vs.  SAN MIGUEL BREWERY

De Grey Mining

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in De Grey Mining are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, De Grey unveiled solid returns over the last few months and may actually be approaching a breakup point.

SAN MIGUEL BREWERY

Risk-Adjusted Performance

1 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in SAN MIGUEL BREWERY are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. 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 De Grey and SAN MIGUEL

The main advantage of trading using opposite De Grey and SAN MIGUEL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if De Grey 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 De Grey Mining 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..