Correlation Between SAN MIGUEL and DAIDO METAL

Can any of the company-specific risk be diversified away by investing in both SAN MIGUEL and DAIDO METAL 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 DAIDO METAL into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between SAN MIGUEL BREWERY and DAIDO METAL TD, you can compare the effects of market volatilities on SAN MIGUEL and DAIDO METAL 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 DAIDO METAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of SAN MIGUEL and DAIDO METAL.

Diversification Opportunities for SAN MIGUEL and DAIDO METAL

0.18

Correlation Coefficient

SAN MIGUEL  DAIDO METAL

Average diversification

The 3 months correlation between SAN and DAIDO is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding SAN MIGUEL BREWERY and DAIDO METAL TD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DAIDO METAL TD 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 BREWERY are associated (or correlated) with DAIDO METAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DAIDO METAL TD has no effect on the direction of SAN MIGUEL i.e., SAN MIGUEL and DAIDO METAL go up and down completely randomly.

Pair Corralation between SAN MIGUEL and DAIDO METAL

Assuming the 90 days trading horizon SAN MIGUEL BREWERY is expected to under-perform the DAIDO METAL. In addition to that, SAN MIGUEL is 2.75 times more volatile than DAIDO METAL TD. It trades about 0.0 of its total potential returns per unit of risk. DAIDO METAL TD is currently generating about 0.12 per unit of volatility. If you would invest  276.00  in DAIDO METAL TD on December 20, 2024 and sell it today you would earn a total of  28.00  from holding DAIDO METAL TD or generate 10.14% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

SAN MIGUEL BREWERY  vs.  DAIDO METAL TD

SAN MIGUEL BREWERY

Risk-Adjusted Performance

Very Weak

Over the last 90 days SAN MIGUEL BREWERY has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, SAN MIGUEL is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

DAIDO METAL TD

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in DAIDO METAL TD are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, DAIDO METAL may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with SAN MIGUEL and DAIDO METAL

The main advantage of trading using opposite SAN MIGUEL and DAIDO METAL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SAN MIGUEL position performs unexpectedly, DAIDO METAL 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 DAIDO METAL will offset losses from the drop in DAIDO METAL's long position.

The idea behind SAN MIGUEL BREWERY and DAIDO METAL TD 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.