Correlation Between SAN MIGUEL and Tsingtao Brewery
Can any of the company-specific risk be diversified away by investing in both SAN MIGUEL and Tsingtao Brewery 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 Tsingtao Brewery 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 Tsingtao Brewery, you can compare the effects of market volatilities on SAN MIGUEL and Tsingtao Brewery 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 Tsingtao Brewery. Check out your portfolio center. Please also check ongoing floating volatility patterns of SAN MIGUEL and Tsingtao Brewery.
Diversification Opportunities for SAN MIGUEL and Tsingtao Brewery
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between SAN and Tsingtao is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding SAN MIGUEL BREWERY and Tsingtao Brewery in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tsingtao Brewery 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 Tsingtao Brewery. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tsingtao Brewery has no effect on the direction of SAN MIGUEL i.e., SAN MIGUEL and Tsingtao Brewery go up and down completely randomly.
Pair Corralation between SAN MIGUEL and Tsingtao Brewery
Assuming the 90 days trading horizon SAN MIGUEL BREWERY is expected to generate 1.82 times more return on investment than Tsingtao Brewery. However, SAN MIGUEL is 1.82 times more volatile than Tsingtao Brewery. It trades about 0.02 of its potential returns per unit of risk. Tsingtao Brewery is currently generating about -0.03 per unit of risk. If you would invest 11.00 in SAN MIGUEL BREWERY on October 26, 2024 and sell it today you would earn a total of 0.00 from holding SAN MIGUEL BREWERY or generate 0.0% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
SAN MIGUEL BREWERY vs. Tsingtao Brewery
Performance |
Timeline |
SAN MIGUEL BREWERY |
Tsingtao Brewery |
SAN MIGUEL and Tsingtao Brewery Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with SAN MIGUEL and Tsingtao Brewery
The main advantage of trading using opposite SAN MIGUEL and Tsingtao Brewery positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SAN MIGUEL position performs unexpectedly, Tsingtao Brewery 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 Tsingtao Brewery will offset losses from the drop in Tsingtao Brewery's long position.SAN MIGUEL vs. VARIOUS EATERIES LS | SAN MIGUEL vs. Renesas Electronics | SAN MIGUEL vs. Methode Electronics | SAN MIGUEL vs. OPERA SOFTWARE |
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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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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