Correlation Between Apple and San Miguel
Can any of the company-specific risk be diversified away by investing in both Apple 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 Apple and San Miguel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Apple Inc and San Miguel, you can compare the effects of market volatilities on Apple 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 Apple with a short position of San Miguel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Apple and San Miguel.
Diversification Opportunities for Apple and San Miguel
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Apple and San is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Apple Inc and San Miguel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on San Miguel and Apple 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 Apple Inc 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 has no effect on the direction of Apple i.e., Apple and San Miguel go up and down completely randomly.
Pair Corralation between Apple and San Miguel
Given the investment horizon of 90 days Apple is expected to generate 3.76 times less return on investment than San Miguel. But when comparing it to its historical volatility, Apple Inc is 6.23 times less risky than San Miguel. It trades about 0.09 of its potential returns per unit of risk. San Miguel is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 145.00 in San Miguel on September 2, 2024 and sell it today you would earn a total of 17.00 from holding San Miguel or generate 11.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Apple Inc vs. San Miguel
Performance |
| Timeline |
| Apple Inc |
| San Miguel |
Apple and San Miguel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Apple and San Miguel
The main advantage of trading using opposite Apple and San Miguel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Apple 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.| Apple vs. Rigetti Computing | Apple vs. D Wave Quantum | Apple vs. Desktop Metal | Apple vs. Quantum Computing |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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