Correlation Between DMCI Holdings and San Miguel

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

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

Diversification Opportunities for DMCI Holdings and San Miguel

0.0

Correlation Coefficient

DMCI Holdings  San Miguel

Pay attention - limited upside

The 3 months correlation between DMCI and San is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding DMCI Holdings ADR and San Miguel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on San Miguel and DMCI Holdings 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 DMCI Holdings ADR 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 has no effect on the direction of DMCI Holdings i.e., DMCI Holdings and San Miguel go up and down completely randomly.

Pair Corralation between DMCI Holdings and San Miguel

If you would invest  153.00  in San Miguel on December 27, 2024 and sell it today you would lose (10.00) from holding San Miguel or give up 6.54% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

DMCI Holdings ADR  vs.  San Miguel

DMCI Holdings ADR

Risk-Adjusted Performance

Very Weak

Over the last 90 days DMCI Holdings ADR has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong technical indicators, DMCI Holdings is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

San Miguel

Risk-Adjusted Performance

Very Weak

Over the last 90 days San Miguel has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable fundamental drivers, San Miguel is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with DMCI Holdings and San Miguel

The main advantage of trading using opposite DMCI Holdings and San Miguel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DMCI Holdings 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 DMCI Holdings ADR and San Miguel 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.

Check out your portfolio center.

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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.