Correlation Between Integrated Micro and San Miguel

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

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

Diversification Opportunities for Integrated Micro and San Miguel

-0.33

Correlation Coefficient

Integrated Micro  San Miguel

Very good diversification

The 3 months correlation between Integrated and San is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Integrated Micro Electronics and San Miguel Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on San Miguel Corp and Integrated Micro 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 Integrated Micro Electronics 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 Corp has no effect on the direction of Integrated Micro i.e., Integrated Micro and San Miguel go up and down completely randomly.

Pair Corralation between Integrated Micro and San Miguel

Assuming the 90 days trading horizon Integrated Micro Electronics is expected to generate 3.54 times more return on investment than San Miguel. However, Integrated Micro is 3.54 times more volatile than San Miguel Corp. It trades about 0.03 of its potential returns per unit of risk. San Miguel Corp is currently generating about 0.01 per unit of risk. If you would invest  145.00  in Integrated Micro Electronics on December 23, 2024 and sell it today you would earn a total of  4.00  from holding Integrated Micro Electronics or generate 2.76% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	93.33%
Values	Daily Returns

Integrated Micro Electronics  vs.  San Miguel Corp

Integrated Micro Ele

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Integrated Micro Electronics are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound technical and fundamental indicators, Integrated Micro is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

San Miguel Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days San Miguel Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable fundamental indicators, San Miguel is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Integrated Micro and San Miguel

The main advantage of trading using opposite Integrated Micro and San Miguel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Integrated Micro 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 Integrated Micro Electronics and San Miguel Corp 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.