Correlation Between SAN MIGUEL and GAZTRTECHNIUADR1/5EO01

Can any of the company-specific risk be diversified away by investing in both SAN MIGUEL and GAZTRTECHNIUADR1/5EO01 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 GAZTRTECHNIUADR1/5EO01 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 GAZTRTECHNIUADR15EO01, you can compare the effects of market volatilities on SAN MIGUEL and GAZTRTECHNIUADR1/5EO01 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 GAZTRTECHNIUADR1/5EO01. Check out your portfolio center. Please also check ongoing floating volatility patterns of SAN MIGUEL and GAZTRTECHNIUADR1/5EO01.

Diversification Opportunities for SAN MIGUEL and GAZTRTECHNIUADR1/5EO01

0.37

Correlation Coefficient

SAN MIGUEL  GAZTRTECHNIUADR1/5EO01

Weak diversification

The 3 months correlation between SAN and GAZTRTECHNIUADR1/5EO01 is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding SAN MIGUEL BREWERY and GAZTRTECHNIUADR15EO01 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GAZTRTECHNIUADR1/5EO01 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 GAZTRTECHNIUADR1/5EO01. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GAZTRTECHNIUADR1/5EO01 has no effect on the direction of SAN MIGUEL i.e., SAN MIGUEL and GAZTRTECHNIUADR1/5EO01 go up and down completely randomly.

Pair Corralation between SAN MIGUEL and GAZTRTECHNIUADR1/5EO01

Assuming the 90 days trading horizon SAN MIGUEL BREWERY is expected to under-perform the GAZTRTECHNIUADR1/5EO01. In addition to that, SAN MIGUEL is 1.62 times more volatile than GAZTRTECHNIUADR15EO01. It trades about 0.0 of its total potential returns per unit of risk. GAZTRTECHNIUADR15EO01 is currently generating about 0.09 per unit of volatility. If you would invest  2,520  in GAZTRTECHNIUADR15EO01 on December 27, 2024 and sell it today you would earn a total of  340.00  from holding GAZTRTECHNIUADR15EO01 or generate 13.49% return on investment over 90 days.

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

SAN MIGUEL BREWERY  vs.  GAZTRTECHNIUADR15EO01

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 latest stock price tumult, may contribute to shorter-term losses for the shareholders.

GAZTRTECHNIUADR1/5EO01

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in GAZTRTECHNIUADR15EO01 are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile technical and fundamental indicators, GAZTRTECHNIUADR1/5EO01 reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with SAN MIGUEL and GAZTRTECHNIUADR1/5EO01

The main advantage of trading using opposite SAN MIGUEL and GAZTRTECHNIUADR1/5EO01 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SAN MIGUEL position performs unexpectedly, GAZTRTECHNIUADR1/5EO01 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 GAZTRTECHNIUADR1/5EO01 will offset losses from the drop in GAZTRTECHNIUADR1/5EO01's long position.

The idea behind SAN MIGUEL BREWERY and GAZTRTECHNIUADR15EO01 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.

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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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.