Correlation Between Jardine Matheson and San Miguel
Can any of the company-specific risk be diversified away by investing in both Jardine Matheson 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 Jardine Matheson and San Miguel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Jardine Matheson Holdings and San Miguel, you can compare the effects of market volatilities on Jardine Matheson 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 Jardine Matheson with a short position of San Miguel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jardine Matheson and San Miguel.
Diversification Opportunities for Jardine Matheson and San Miguel
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between Jardine and San is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Jardine Matheson Holdings and San Miguel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on San Miguel and Jardine Matheson 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 Jardine Matheson Holdings 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 Jardine Matheson i.e., Jardine Matheson and San Miguel go up and down completely randomly.
Pair Corralation between Jardine Matheson and San Miguel
Assuming the 90 days horizon Jardine Matheson is expected to generate 1.63 times less return on investment than San Miguel. In addition to that, Jardine Matheson is 1.23 times more volatile than San Miguel. It trades about 0.16 of its total potential returns per unit of risk. San Miguel is currently generating about 0.31 per unit of volatility. If you would invest 138.00 in San Miguel on September 2, 2024 and sell it today you would earn a total of 24.00 from holding San Miguel or generate 17.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jardine Matheson Holdings vs. San Miguel
Performance |
| Timeline |
| Jardine Matheson Holdings |
| San Miguel |
Jardine Matheson and San Miguel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jardine Matheson and San Miguel
The main advantage of trading using opposite Jardine Matheson and San Miguel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jardine Matheson 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.| Jardine Matheson vs. 3M Company | Jardine Matheson vs. CK Hutchison Holdings | Jardine Matheson vs. Swire Pacific Ltd | Jardine Matheson vs. Teijin |
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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