Correlation Between SAN MIGUEL and Costco Wholesale
Can any of the company-specific risk be diversified away by investing in both SAN MIGUEL and Costco Wholesale 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 Costco Wholesale 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 Costco Wholesale Corp, you can compare the effects of market volatilities on SAN MIGUEL and Costco Wholesale 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 Costco Wholesale. Check out your portfolio center. Please also check ongoing floating volatility patterns of SAN MIGUEL and Costco Wholesale.
Diversification Opportunities for SAN MIGUEL and Costco Wholesale
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between SAN and Costco is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding SAN MIGUEL BREWERY and Costco Wholesale Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Costco Wholesale Corp 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 Costco Wholesale. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Costco Wholesale Corp has no effect on the direction of SAN MIGUEL i.e., SAN MIGUEL and Costco Wholesale go up and down completely randomly.
Pair Corralation between SAN MIGUEL and Costco Wholesale
Assuming the 90 days trading horizon SAN MIGUEL BREWERY is expected to generate 4.93 times more return on investment than Costco Wholesale. However, SAN MIGUEL is 4.93 times more volatile than Costco Wholesale Corp. It trades about 0.05 of its potential returns per unit of risk. Costco Wholesale Corp is currently generating about 0.12 per unit of risk. If you would invest 4.24 in SAN MIGUEL BREWERY on October 18, 2024 and sell it today you would earn a total of 5.26 from holding SAN MIGUEL BREWERY or generate 124.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SAN MIGUEL BREWERY vs. Costco Wholesale Corp
Performance |
| Timeline |
| SAN MIGUEL BREWERY |
| Costco Wholesale Corp |
SAN MIGUEL and Costco Wholesale Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SAN MIGUEL and Costco Wholesale
The main advantage of trading using opposite SAN MIGUEL and Costco Wholesale positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SAN MIGUEL position performs unexpectedly, Costco Wholesale 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 Costco Wholesale will offset losses from the drop in Costco Wholesale's long position.| SAN MIGUEL vs. CARDINAL HEALTH | SAN MIGUEL vs. Coffee Holding Co | SAN MIGUEL vs. CVS Health | SAN MIGUEL vs. Cardinal Health |
| Costco Wholesale vs. SAN MIGUEL BREWERY | Costco Wholesale vs. ZURICH INSURANCE GROUP | Costco Wholesale vs. United Insurance Holdings | Costco Wholesale vs. Safety Insurance Group |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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