Correlation Between SAN MIGUEL and ITALIAN WINE
Can any of the company-specific risk be diversified away by investing in both SAN MIGUEL and ITALIAN WINE 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 ITALIAN WINE 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 ITALIAN WINE BRANDS, you can compare the effects of market volatilities on SAN MIGUEL and ITALIAN WINE 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 ITALIAN WINE. Check out your portfolio center. Please also check ongoing floating volatility patterns of SAN MIGUEL and ITALIAN WINE.
Diversification Opportunities for SAN MIGUEL and ITALIAN WINE
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between SAN and ITALIAN is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding SAN MIGUEL BREWERY and ITALIAN WINE BRANDS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ITALIAN WINE BRANDS 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 ITALIAN WINE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ITALIAN WINE BRANDS has no effect on the direction of SAN MIGUEL i.e., SAN MIGUEL and ITALIAN WINE go up and down completely randomly.
Pair Corralation between SAN MIGUEL and ITALIAN WINE
Assuming the 90 days trading horizon SAN MIGUEL BREWERY is expected to generate 1.1 times more return on investment than ITALIAN WINE. However, SAN MIGUEL is 1.1 times more volatile than ITALIAN WINE BRANDS. It trades about 0.19 of its potential returns per unit of risk. ITALIAN WINE BRANDS is currently generating about -0.04 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 | 95.24% |
Values | Daily Returns |
SAN MIGUEL BREWERY vs. ITALIAN WINE BRANDS
Performance |
Timeline |
SAN MIGUEL BREWERY |
ITALIAN WINE BRANDS |
SAN MIGUEL and ITALIAN WINE Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with SAN MIGUEL and ITALIAN WINE
The main advantage of trading using opposite SAN MIGUEL and ITALIAN WINE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SAN MIGUEL position performs unexpectedly, ITALIAN WINE 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 ITALIAN WINE will offset losses from the drop in ITALIAN WINE's long position.SAN MIGUEL vs. Align Technology | SAN MIGUEL vs. Guangdong Investment Limited | SAN MIGUEL vs. Vishay Intertechnology | SAN MIGUEL vs. SEI INVESTMENTS |
ITALIAN WINE vs. Jacquet Metal Service | ITALIAN WINE vs. MONEYSUPERMARKET | ITALIAN WINE vs. Western Copper and | ITALIAN WINE vs. MAGNUM MINING EXP |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
Other Complementary Tools
Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
Transaction History View history of all your transactions and understand their impact on performance | |
Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk |