Correlation Between National Health and San Miguel
Can any of the company-specific risk be diversified away by investing in both National Health 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 National Health and San Miguel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between National Health Scan and San Miguel, you can compare the effects of market volatilities on National Health 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 National Health with a short position of San Miguel. Check out your portfolio center. Please also check ongoing floating volatility patterns of National Health and San Miguel.
Diversification Opportunities for National Health and San Miguel
-0.24 | Correlation Coefficient |
Very good diversification
The 3 months correlation between National and San is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding National Health Scan and San Miguel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on San Miguel and National Health 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 National Health Scan 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 National Health i.e., National Health and San Miguel go up and down completely randomly.
Pair Corralation between National Health and San Miguel
Given the investment horizon of 90 days National Health Scan is expected to generate 5.14 times more return on investment than San Miguel. However, National Health is 5.14 times more volatile than San Miguel. It trades about 0.08 of its potential returns per unit of risk. San Miguel is currently generating about 0.01 per unit of risk. If you would invest 1.10 in National Health Scan on December 28, 2024 and sell it today you would lose (0.40) from holding National Health Scan or give up 36.36% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
National Health Scan vs. San Miguel
Performance |
Timeline |
National Health Scan |
San Miguel |
National Health and San Miguel Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with National Health and San Miguel
The main advantage of trading using opposite National Health and San Miguel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if National Health 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.National Health vs. Emergent Health Corp | National Health vs. One World Universe | National Health vs. Nextmart | National Health vs. HeadsUp Entertainment International |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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