Correlation Between Bank of the and San Miguel
Can any of the company-specific risk be diversified away by investing in both Bank of the 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 Bank of the and San Miguel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bank of the and San Miguel Corp, you can compare the effects of market volatilities on Bank of the 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 Bank of the with a short position of San Miguel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of the and San Miguel.
Diversification Opportunities for Bank of the and San Miguel
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Bank and San is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Bank of the and San Miguel Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on San Miguel Corp and Bank of the 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 Bank of the 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 Corp has no effect on the direction of Bank of the i.e., Bank of the and San Miguel go up and down completely randomly.
Pair Corralation between Bank of the and San Miguel
Assuming the 90 days trading horizon Bank of the is expected to generate 0.63 times more return on investment than San Miguel. However, Bank of the is 1.58 times less risky than San Miguel. It trades about -0.01 of its potential returns per unit of risk. San Miguel Corp is currently generating about -0.1 per unit of risk. If you would invest 12,200 in Bank of the on October 20, 2024 and sell it today you would lose (50.00) from holding Bank of the or give up 0.41% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bank of the vs. San Miguel Corp
Performance |
| Timeline |
| Bank of the |
| San Miguel Corp |
Bank of the and San Miguel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of the and San Miguel
The main advantage of trading using opposite Bank of the and San Miguel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of the 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.| Bank of the vs. Robinsons Retail Holdings | Bank of the vs. Apex Mining Co | Bank of the vs. Metro Retail Stores | Bank of the vs. Crown Asia Chemicals |
| San Miguel vs. SM Investments Corp | San Miguel vs. San Miguel Pure | San Miguel vs. Ayala Corp | San Miguel vs. BDO Unibank |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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