Correlation Between SAN MIGUEL and Hormel Foods
Can any of the company-specific risk be diversified away by investing in both SAN MIGUEL and Hormel Foods 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 Hormel Foods 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 Hormel Foods, you can compare the effects of market volatilities on SAN MIGUEL and Hormel Foods 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 Hormel Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of SAN MIGUEL and Hormel Foods.
Diversification Opportunities for SAN MIGUEL and Hormel Foods
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between SAN and Hormel is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding SAN MIGUEL BREWERY and Hormel Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hormel Foods 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 Hormel Foods. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hormel Foods has no effect on the direction of SAN MIGUEL i.e., SAN MIGUEL and Hormel Foods go up and down completely randomly.
Pair Corralation between SAN MIGUEL and Hormel Foods
Assuming the 90 days trading horizon SAN MIGUEL BREWERY is expected to generate 2.19 times more return on investment than Hormel Foods. However, SAN MIGUEL is 2.19 times more volatile than Hormel Foods. It trades about 0.19 of its potential returns per unit of risk. Hormel Foods is currently generating about -0.11 per unit of risk. If you would invest 10.00 in SAN MIGUEL BREWERY on November 2, 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 Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SAN MIGUEL BREWERY vs. Hormel Foods
Performance |
| Timeline |
| SAN MIGUEL BREWERY |
| Hormel Foods |
SAN MIGUEL and Hormel Foods Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SAN MIGUEL and Hormel Foods
The main advantage of trading using opposite SAN MIGUEL and Hormel Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SAN MIGUEL position performs unexpectedly, Hormel Foods 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 Hormel Foods will offset losses from the drop in Hormel Foods' long position.| SAN MIGUEL vs. Align Technology | SAN MIGUEL vs. Guangdong Investment Limited | SAN MIGUEL vs. Vishay Intertechnology | SAN MIGUEL vs. SEI INVESTMENTS |
| Hormel Foods vs. Tradegate AG Wertpapierhandelsbank | Hormel Foods vs. Nordic Semiconductor ASA | Hormel Foods vs. ELMOS SEMICONDUCTOR | Hormel Foods vs. Canon Marketing Japan |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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