Correlation Between SAN MIGUEL and McDonalds
Can any of the company-specific risk be diversified away by investing in both SAN MIGUEL and McDonalds 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 McDonalds 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 McDonalds, you can compare the effects of market volatilities on SAN MIGUEL and McDonalds 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 McDonalds. Check out your portfolio center. Please also check ongoing floating volatility patterns of SAN MIGUEL and McDonalds.
Diversification Opportunities for SAN MIGUEL and McDonalds
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between SAN and McDonalds is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding SAN MIGUEL BREWERY and McDonalds in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on McDonalds 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 McDonalds. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of McDonalds has no effect on the direction of SAN MIGUEL i.e., SAN MIGUEL and McDonalds go up and down completely randomly.
Pair Corralation between SAN MIGUEL and McDonalds
Assuming the 90 days trading horizon SAN MIGUEL BREWERY is expected to generate 2.95 times more return on investment than McDonalds. However, SAN MIGUEL is 2.95 times more volatile than McDonalds. It trades about 0.28 of its potential returns per unit of risk. McDonalds is currently generating about -0.1 per unit of risk. If you would invest 10.00 in SAN MIGUEL BREWERY on November 3, 2024 and sell it today you would earn a total of 2.00 from holding SAN MIGUEL BREWERY or generate 20.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
SAN MIGUEL BREWERY vs. McDonalds
Performance |
| Timeline |
| SAN MIGUEL BREWERY |
| McDonalds |
SAN MIGUEL and McDonalds Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SAN MIGUEL and McDonalds
The main advantage of trading using opposite SAN MIGUEL and McDonalds positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SAN MIGUEL position performs unexpectedly, McDonalds 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 McDonalds will offset losses from the drop in McDonalds' long position.| SAN MIGUEL vs. COSMOSTEEL HLDGS | SAN MIGUEL vs. INTER CARS SA | SAN MIGUEL vs. MAANSHAN IRON H | SAN MIGUEL vs. Nishi Nippon Railroad Co |
| McDonalds vs. SEALED AIR | McDonalds vs. SERI INDUSTRIAL EO | McDonalds vs. Delta Air Lines | McDonalds vs. SOGECLAIR SA INH |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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