Correlation Between SAN MIGUEL and NATIONAL HEALTHCARE
Can any of the company-specific risk be diversified away by investing in both SAN MIGUEL and NATIONAL HEALTHCARE 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 NATIONAL HEALTHCARE 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 NATIONAL HEALTHCARE, you can compare the effects of market volatilities on SAN MIGUEL and NATIONAL HEALTHCARE 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 NATIONAL HEALTHCARE. Check out your portfolio center. Please also check ongoing floating volatility patterns of SAN MIGUEL and NATIONAL HEALTHCARE.
Diversification Opportunities for SAN MIGUEL and NATIONAL HEALTHCARE
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between SAN and NATIONAL is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding SAN MIGUEL BREWERY and NATIONAL HEALTHCARE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NATIONAL HEALTHCARE 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 NATIONAL HEALTHCARE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NATIONAL HEALTHCARE has no effect on the direction of SAN MIGUEL i.e., SAN MIGUEL and NATIONAL HEALTHCARE go up and down completely randomly.
Pair Corralation between SAN MIGUEL and NATIONAL HEALTHCARE
Assuming the 90 days trading horizon SAN MIGUEL BREWERY is expected to generate 1.42 times more return on investment than NATIONAL HEALTHCARE. However, SAN MIGUEL is 1.42 times more volatile than NATIONAL HEALTHCARE. It trades about -0.29 of its potential returns per unit of risk. NATIONAL HEALTHCARE is currently generating about -0.62 per unit of risk. If you would invest 11.00 in SAN MIGUEL BREWERY on October 11, 2024 and sell it today you would lose (1.25) from holding SAN MIGUEL BREWERY or give up 11.36% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SAN MIGUEL BREWERY vs. NATIONAL HEALTHCARE
Performance |
| Timeline |
| SAN MIGUEL BREWERY |
| NATIONAL HEALTHCARE |
SAN MIGUEL and NATIONAL HEALTHCARE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SAN MIGUEL and NATIONAL HEALTHCARE
The main advantage of trading using opposite SAN MIGUEL and NATIONAL HEALTHCARE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SAN MIGUEL position performs unexpectedly, NATIONAL HEALTHCARE 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 NATIONAL HEALTHCARE will offset losses from the drop in NATIONAL HEALTHCARE's long position.| SAN MIGUEL vs. AOI Electronics Co | SAN MIGUEL vs. alstria office REIT AG | SAN MIGUEL vs. 24SEVENOFFICE GROUP AB | SAN MIGUEL vs. Methode Electronics |
| NATIONAL HEALTHCARE vs. Quaker Chemical | NATIONAL HEALTHCARE vs. KINGBOARD CHEMICAL | NATIONAL HEALTHCARE vs. INDO RAMA SYNTHETIC | NATIONAL HEALTHCARE vs. SAN MIGUEL BREWERY |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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