Correlation Between SAN MIGUEL and SLR Investment

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

Diversification Opportunities for SAN MIGUEL and SLR Investment

0.2

Correlation Coefficient

SAN MIGUEL  SLR Investment

Modest diversification

The 3 months correlation between SAN and SLR is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding SAN MIGUEL BREWERY and SLR Investment Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SLR Investment Corp 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 SLR Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SLR Investment Corp has no effect on the direction of SAN MIGUEL i.e., SAN MIGUEL and SLR Investment go up and down completely randomly.

Pair Corralation between SAN MIGUEL and SLR Investment

Assuming the 90 days trading horizon SAN MIGUEL BREWERY is expected to under-perform the SLR Investment. In addition to that, SAN MIGUEL is 3.45 times more volatile than SLR Investment Corp. It trades about 0.0 of its total potential returns per unit of risk. SLR Investment Corp is currently generating about 0.07 per unit of volatility. If you would invest  1,460  in SLR Investment Corp on December 19, 2024 and sell it today you would earn a total of  69.00  from holding SLR Investment Corp or generate 4.73% 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.  SLR Investment Corp

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.

SLR Investment Corp

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in SLR Investment Corp are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, SLR Investment is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with SAN MIGUEL and SLR Investment

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

The idea behind SAN MIGUEL BREWERY and SLR Investment Corp 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.