Correlation Between Ledesma SAAI and San Miguel
Can any of the company-specific risk be diversified away by investing in both Ledesma SAAI 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 Ledesma SAAI and San Miguel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ledesma SAAI and San Miguel AG, you can compare the effects of market volatilities on Ledesma SAAI 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 Ledesma SAAI with a short position of San Miguel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ledesma SAAI and San Miguel.
Diversification Opportunities for Ledesma SAAI and San Miguel
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Ledesma and San is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Ledesma SAAI 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 Ledesma SAAI 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 Ledesma SAAI 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 Ledesma SAAI i.e., Ledesma SAAI and San Miguel go up and down completely randomly.
Pair Corralation between Ledesma SAAI and San Miguel
Assuming the 90 days trading horizon Ledesma SAAI is expected to generate 0.7 times more return on investment than San Miguel. However, Ledesma SAAI is 1.43 times less risky than San Miguel. It trades about 0.02 of its potential returns per unit of risk. San Miguel AG is currently generating about -0.1 per unit of risk. If you would invest 148,000 in Ledesma SAAI on November 2, 2024 and sell it today you would earn a total of 500.00 from holding Ledesma SAAI or generate 0.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Ledesma SAAI vs. San Miguel AG
Performance |
| Timeline |
| Ledesma SAAI |
| San Miguel AG |
Ledesma SAAI and San Miguel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ledesma SAAI and San Miguel
The main advantage of trading using opposite Ledesma SAAI and San Miguel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ledesma SAAI 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.| Ledesma SAAI vs. Harmony Gold Mining | Ledesma SAAI vs. Agrometal SAI | Ledesma SAAI vs. United States Steel | Ledesma SAAI vs. Compania de Transporte |
| San Miguel vs. Compania de Transporte | San Miguel vs. Agrometal SAI | San Miguel vs. Harmony Gold Mining | San Miguel vs. Transportadora de Gas |
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 Stocks Directory module to find actively traded stocks across global markets.
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