Correlation Between San Miguel and Bank of the
Can any of the company-specific risk be diversified away by investing in both San Miguel and Bank of the 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 San Miguel and Bank of the into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between San Miguel Pure and Bank of the, you can compare the effects of market volatilities on San Miguel and Bank of the 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 San Miguel with a short position of Bank of the. Check out your portfolio center. Please also check ongoing floating volatility patterns of San Miguel and Bank of the.
Diversification Opportunities for San Miguel and Bank of the
0.02 | Correlation Coefficient |
Significant diversification
The 3 months correlation between San and Bank is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding San Miguel Pure and Bank of the in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bank of the and San Miguel 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 San Miguel Pure are associated (or correlated) with Bank of the. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bank of the has no effect on the direction of San Miguel i.e., San Miguel and Bank of the go up and down completely randomly.
Pair Corralation between San Miguel and Bank of the
Assuming the 90 days trading horizon San Miguel Pure is expected to generate 0.61 times more return on investment than Bank of the. However, San Miguel Pure is 1.65 times less risky than Bank of the. It trades about -0.18 of its potential returns per unit of risk. Bank of the is currently generating about -0.2 per unit of risk. If you would invest 5,300 in San Miguel Pure on September 23, 2024 and sell it today you would lose (230.00) from holding San Miguel Pure or give up 4.34% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
San Miguel Pure vs. Bank of the
Performance |
Timeline |
San Miguel Pure |
Bank of the |
San Miguel and Bank of the Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with San Miguel and Bank of the
The main advantage of trading using opposite San Miguel and Bank of the positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if San Miguel position performs unexpectedly, Bank of the 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 Bank of the will offset losses from the drop in Bank of the's long position.San Miguel vs. Alliance Select Foods | San Miguel vs. Del Monte Pacific | San Miguel vs. Ever Gotesco Resources |
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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 Global Correlations module to find global opportunities by holding instruments from different markets.
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