Correlation Between SAN MIGUEL and Trip Group

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

Diversification Opportunities for SAN MIGUEL and Trip Group

-0.25

Correlation Coefficient

SAN MIGUEL  Trip Group

Very good diversification

The 3 months correlation between SAN and Trip is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding SAN MIGUEL BREWERY and Trip Group Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Trip Group Limited 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 Trip Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Trip Group Limited has no effect on the direction of SAN MIGUEL i.e., SAN MIGUEL and Trip Group go up and down completely randomly.

Pair Corralation between SAN MIGUEL and Trip Group

Assuming the 90 days trading horizon SAN MIGUEL BREWERY is expected to generate 1.32 times more return on investment than Trip Group. However, SAN MIGUEL is 1.32 times more volatile than Trip Group Limited. It trades about 0.0 of its potential returns per unit of risk. Trip Group Limited is currently generating about -0.08 per unit of risk. If you would invest  10.00  in SAN MIGUEL BREWERY on December 19, 2024 and sell it today you would lose (0.50) from holding SAN MIGUEL BREWERY or give up 5.0% of portfolio value over 90 days.

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

SAN MIGUEL BREWERY  vs.  Trip Group Limited

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.

Trip Group Limited

Risk-Adjusted Performance

Very Weak

Over the last 90 days Trip Group Limited has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with SAN MIGUEL and Trip Group

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

The idea behind SAN MIGUEL BREWERY and Trip Group Limited 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.