Correlation Between Cresud SA and San Miguel
Can any of the company-specific risk be diversified away by investing in both Cresud SA 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 Cresud SA and San Miguel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cresud SA and San Miguel AG, you can compare the effects of market volatilities on Cresud SA 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 Cresud SA with a short position of San Miguel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cresud SA and San Miguel.
Diversification Opportunities for Cresud SA and San Miguel
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Cresud and San is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Cresud SA and San Miguel AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on San Miguel AG and Cresud SA 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 Cresud SA 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 AG has no effect on the direction of Cresud SA i.e., Cresud SA and San Miguel go up and down completely randomly.
Pair Corralation between Cresud SA and San Miguel
Assuming the 90 days trading horizon Cresud SA is expected to generate 0.89 times more return on investment than San Miguel. However, Cresud SA is 1.13 times less risky than San Miguel. It trades about -0.01 of its potential returns per unit of risk. San Miguel AG is currently generating about -0.24 per unit of risk. If you would invest 144,000 in Cresud SA on October 20, 2024 and sell it today you would lose (1,500) from holding Cresud SA or give up 1.04% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cresud SA vs. San Miguel AG
Performance |
| Timeline |
| Cresud SA |
| San Miguel AG |
Cresud SA and San Miguel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cresud SA and San Miguel
The main advantage of trading using opposite Cresud SA and San Miguel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cresud SA 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.| Cresud SA vs. Molinos Agro SA | Cresud SA vs. San Miguel AG | Cresud SA vs. Ledesma SAAI | Cresud SA vs. Inversora Juramento SA |
| San Miguel vs. Molinos Agro SA | San Miguel vs. Cresud SA | San Miguel vs. Ledesma SAAI | San Miguel vs. Inversora Juramento SA |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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