Correlation Between SAN MIGUEL and Aluminumof China
Can any of the company-specific risk be diversified away by investing in both SAN MIGUEL and Aluminumof China 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 Aluminumof China 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 Aluminum of, you can compare the effects of market volatilities on SAN MIGUEL and Aluminumof China 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 Aluminumof China. Check out your portfolio center. Please also check ongoing floating volatility patterns of SAN MIGUEL and Aluminumof China.
Diversification Opportunities for SAN MIGUEL and Aluminumof China
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between SAN and Aluminumof is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding SAN MIGUEL BREWERY and Aluminum of in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aluminumof China 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 Aluminumof China. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aluminumof China has no effect on the direction of SAN MIGUEL i.e., SAN MIGUEL and Aluminumof China go up and down completely randomly.
Pair Corralation between SAN MIGUEL and Aluminumof China
Assuming the 90 days trading horizon SAN MIGUEL BREWERY is expected to under-perform the Aluminumof China. But the stock apears to be less risky and, when comparing its historical volatility, SAN MIGUEL BREWERY is 4.85 times less risky than Aluminumof China. The stock trades about -0.24 of its potential returns per unit of risk. The Aluminum of is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 55.00 in Aluminum of on October 14, 2024 and sell it today you would earn a total of 1.00 from holding Aluminum of or generate 1.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SAN MIGUEL BREWERY vs. Aluminum of
Performance |
| Timeline |
| SAN MIGUEL BREWERY |
| Aluminumof China |
SAN MIGUEL and Aluminumof China Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SAN MIGUEL and Aluminumof China
The main advantage of trading using opposite SAN MIGUEL and Aluminumof China positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SAN MIGUEL position performs unexpectedly, Aluminumof China 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 Aluminumof China will offset losses from the drop in Aluminumof China's long position.| SAN MIGUEL vs. Laureate Education | SAN MIGUEL vs. SEI INVESTMENTS | SAN MIGUEL vs. MidCap Financial Investment | SAN MIGUEL vs. IDP EDUCATION LTD |
| Aluminumof China vs. Stag Industrial | Aluminumof China vs. Kingdee International Software | Aluminumof China vs. Unity Software | Aluminumof China vs. USU Software AG |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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