Correlation Between San Miguel and SM Investments
Can any of the company-specific risk be diversified away by investing in both San Miguel and SM Investments 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 SM Investments 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 SM Investments Corp, you can compare the effects of market volatilities on San Miguel and SM Investments 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 SM Investments. Check out your portfolio center. Please also check ongoing floating volatility patterns of San Miguel and SM Investments.
Diversification Opportunities for San Miguel and SM Investments
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between San and SM Investments is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding San Miguel Pure and SM Investments Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SM Investments Corp 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 SM Investments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SM Investments Corp has no effect on the direction of San Miguel i.e., San Miguel and SM Investments go up and down completely randomly.
Pair Corralation between San Miguel and SM Investments
Assuming the 90 days trading horizon San Miguel Pure is expected to generate 0.71 times more return on investment than SM Investments. However, San Miguel Pure is 1.4 times less risky than SM Investments. It trades about -0.02 of its potential returns per unit of risk. SM Investments Corp is currently generating about -0.08 per unit of risk. If you would invest 5,208 in San Miguel Pure on September 23, 2024 and sell it today you would lose (138.00) from holding San Miguel Pure or give up 2.65% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
San Miguel Pure vs. SM Investments Corp
Performance |
Timeline |
San Miguel Pure |
SM Investments Corp |
San Miguel and SM Investments Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with San Miguel and SM Investments
The main advantage of trading using opposite San Miguel and SM Investments positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if San Miguel position performs unexpectedly, SM Investments 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 SM Investments will offset losses from the drop in SM Investments' long position.San Miguel vs. Alliance Select Foods | San Miguel vs. Del Monte Pacific | San Miguel vs. Ever Gotesco Resources |
SM Investments vs. Ayala Corp | SM Investments vs. Alliance Global Group | SM Investments vs. DMCI Holdings |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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