Correlation Between SAN MIGUEL and Paragon GmbH

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

Diversification Opportunities for SAN MIGUEL and Paragon GmbH

0.49

Correlation Coefficient

SAN MIGUEL  Paragon GmbH

Very weak diversification

The 3 months correlation between SAN and Paragon is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding SAN MIGUEL BREWERY and paragon GmbH Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on paragon GmbH 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 Paragon GmbH. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of paragon GmbH has no effect on the direction of SAN MIGUEL i.e., SAN MIGUEL and Paragon GmbH go up and down completely randomly.

Pair Corralation between SAN MIGUEL and Paragon GmbH

Assuming the 90 days trading horizon SAN MIGUEL BREWERY is expected to under-perform the Paragon GmbH. But the stock apears to be less risky and, when comparing its historical volatility, SAN MIGUEL BREWERY is 3.44 times less risky than Paragon GmbH. The stock trades about -0.24 of its potential returns per unit of risk. The paragon GmbH Co is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest  181.00  in paragon GmbH Co on October 11, 2024 and sell it today you would earn a total of  33.00  from holding paragon GmbH Co or generate 18.23% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	94.44%
Values	Daily Returns

SAN MIGUEL BREWERY  vs.  paragon GmbH Co

SAN MIGUEL BREWERY

Risk-Adjusted Performance

0 of 100

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 uncertain performance in the last few months, the Stock's basic indicators remain rather sound which may send shares a bit higher in February 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

paragon GmbH

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in paragon GmbH Co are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly unsteady basic indicators, Paragon GmbH may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with SAN MIGUEL and Paragon GmbH

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

The idea behind SAN MIGUEL BREWERY and paragon GmbH Co 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.