Correlation Between SAN MIGUEL and Northern Data

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

Diversification Opportunities for SAN MIGUEL and Northern Data

-0.77

Correlation Coefficient

SAN MIGUEL  Northern Data

Pay attention - limited upside

The 3 months correlation between SAN and Northern is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding SAN MIGUEL BREWERY and Northern Data AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Northern Data AG 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 Northern Data. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Northern Data AG has no effect on the direction of SAN MIGUEL i.e., SAN MIGUEL and Northern Data go up and down completely randomly.

Pair Corralation between SAN MIGUEL and Northern Data

Assuming the 90 days trading horizon SAN MIGUEL is expected to generate 11.35 times less return on investment than Northern Data. In addition to that, SAN MIGUEL is 1.0 times more volatile than Northern Data AG. It trades about 0.02 of its total potential returns per unit of risk. Northern Data AG is currently generating about 0.22 per unit of volatility. If you would invest  2,940  in Northern Data AG on October 25, 2024 and sell it today you would earn a total of  1,700  from holding Northern Data AG or generate 57.82% return on investment over 90 days.

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

SAN MIGUEL BREWERY  vs.  Northern Data AG

SAN MIGUEL BREWERY

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in SAN MIGUEL BREWERY are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. 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.

Northern Data AG

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Northern Data AG are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile basic indicators, Northern Data unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with SAN MIGUEL and Northern Data

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

The idea behind SAN MIGUEL BREWERY and Northern Data AG 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 Stocks Directory module to find actively traded stocks across global markets.