Correlation Between MidCap Financial and SAN MIGUEL
Can any of the company-specific risk be diversified away by investing in both MidCap Financial 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 MidCap Financial and SAN MIGUEL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MidCap Financial Investment and SAN MIGUEL BREWERY, you can compare the effects of market volatilities on MidCap Financial 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 MidCap Financial with a short position of SAN MIGUEL. Check out your portfolio center. Please also check ongoing floating volatility patterns of MidCap Financial and SAN MIGUEL.
Diversification Opportunities for MidCap Financial and SAN MIGUEL
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between MidCap and SAN is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding MidCap Financial Investment and SAN MIGUEL BREWERY in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SAN MIGUEL BREWERY and MidCap Financial 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 MidCap Financial 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 BREWERY has no effect on the direction of MidCap Financial i.e., MidCap Financial and SAN MIGUEL go up and down completely randomly.
Pair Corralation between MidCap Financial and SAN MIGUEL
Assuming the 90 days trading horizon MidCap Financial Investment is expected to generate 0.25 times more return on investment than SAN MIGUEL. However, MidCap Financial Investment is 3.94 times less risky than SAN MIGUEL. It trades about 0.1 of its potential returns per unit of risk. SAN MIGUEL BREWERY is currently generating about -0.05 per unit of risk. If you would invest 1,186 in MidCap Financial Investment on October 14, 2024 and sell it today you would earn a total of 79.00 from holding MidCap Financial Investment or generate 6.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
MidCap Financial Investment vs. SAN MIGUEL BREWERY
Performance |
| Timeline |
| MidCap Financial Inv |
| SAN MIGUEL BREWERY |
MidCap Financial and SAN MIGUEL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MidCap Financial and SAN MIGUEL
The main advantage of trading using opposite MidCap Financial and SAN MIGUEL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MidCap Financial 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.| MidCap Financial vs. Apple Inc | MidCap Financial vs. Apple Inc | MidCap Financial vs. Apple Inc | MidCap Financial vs. Apple Inc |
| SAN MIGUEL vs. Laureate Education | SAN MIGUEL vs. SEI INVESTMENTS | SAN MIGUEL vs. MidCap Financial Investment | SAN MIGUEL vs. IDP EDUCATION LTD |
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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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