Correlation Between SAN MIGUEL and American Eagle
Can any of the company-specific risk be diversified away by investing in both SAN MIGUEL and American Eagle 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 SAN MIGUEL and American Eagle into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SAN MIGUEL BREWERY and American Eagle Outfitters, you can compare the effects of market volatilities on SAN MIGUEL and American Eagle 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 SAN MIGUEL with a short position of American Eagle. Check out your portfolio center. Please also check ongoing floating volatility patterns of SAN MIGUEL and American Eagle.
Diversification Opportunities for SAN MIGUEL and American Eagle
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between SAN and American is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding SAN MIGUEL BREWERY and American Eagle Outfitters in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Eagle Outfitters and SAN MIGUEL 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 SAN MIGUEL BREWERY are associated (or correlated) with American Eagle. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Eagle Outfitters has no effect on the direction of SAN MIGUEL i.e., SAN MIGUEL and American Eagle go up and down completely randomly.
Pair Corralation between SAN MIGUEL and American Eagle
Assuming the 90 days trading horizon SAN MIGUEL BREWERY is expected to generate 1.2 times more return on investment than American Eagle. However, SAN MIGUEL is 1.2 times more volatile than American Eagle Outfitters. It trades about 0.2 of its potential returns per unit of risk. American Eagle Outfitters is currently generating about -0.08 per unit of risk. If you would invest 10.00 in SAN MIGUEL BREWERY on November 1, 2024 and sell it today you would earn a total of 1.00 from holding SAN MIGUEL BREWERY or generate 10.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
SAN MIGUEL BREWERY vs. American Eagle Outfitters
Performance |
| Timeline |
| SAN MIGUEL BREWERY |
| American Eagle Outfitters |
SAN MIGUEL and American Eagle Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SAN MIGUEL and American Eagle
The main advantage of trading using opposite SAN MIGUEL and American Eagle positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SAN MIGUEL position performs unexpectedly, American Eagle 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 American Eagle will offset losses from the drop in American Eagle's long position.| SAN MIGUEL vs. Performance Food Group | SAN MIGUEL vs. PATTIES FOODS | SAN MIGUEL vs. PLANT VEDA FOODS | SAN MIGUEL vs. US FOODS HOLDING |
| American Eagle vs. DICKER DATA LTD | American Eagle vs. DATAGROUP SE | American Eagle vs. PLAYWAY SA ZY 10 | American Eagle vs. Columbia Sportswear |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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