Correlation Between Top Frontier and San Miguel

Can any of the company-specific risk be diversified away by investing in both Top Frontier and San Miguel 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 Top Frontier and San Miguel into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Top Frontier Investment and San Miguel Pure, you can compare the effects of market volatilities on Top Frontier and San Miguel 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 Top Frontier with a short position of San Miguel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Top Frontier and San Miguel.

Diversification Opportunities for Top Frontier and San Miguel

-0.19

Correlation Coefficient

Top Frontier  San Miguel

Good diversification

The 3 months correlation between Top and San is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Top Frontier Investment and San Miguel Pure in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on San Miguel Pure and Top Frontier 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 Top Frontier Investment are associated (or correlated) with San Miguel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of San Miguel Pure has no effect on the direction of Top Frontier i.e., Top Frontier and San Miguel go up and down completely randomly.

Pair Corralation between Top Frontier and San Miguel

Assuming the 90 days trading horizon Top Frontier Investment is expected to generate 1.64 times more return on investment than San Miguel. However, Top Frontier is 1.64 times more volatile than San Miguel Pure. It trades about 0.07 of its potential returns per unit of risk. San Miguel Pure is currently generating about -0.09 per unit of risk. If you would invest  6,600  in Top Frontier Investment on October 10, 2024 and sell it today you would earn a total of  170.00  from holding Top Frontier Investment or generate 2.58% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	94.12%
Values	Daily Returns

Top Frontier Investment  vs.  San Miguel Pure

Top Frontier Investment

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Top Frontier Investment are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Top Frontier may actually be approaching a critical reversion point that can send shares even higher in February 2025.

San Miguel Pure

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days San Miguel Pure 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 latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Top Frontier and San Miguel

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

The idea behind Top Frontier Investment and San Miguel Pure 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.