Correlation Between SAN MIGUEL and OPERA SOFTWARE
Can any of the company-specific risk be diversified away by investing in both SAN MIGUEL and OPERA SOFTWARE 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 OPERA SOFTWARE 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 OPERA SOFTWARE, you can compare the effects of market volatilities on SAN MIGUEL and OPERA SOFTWARE 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 OPERA SOFTWARE. Check out your portfolio center. Please also check ongoing floating volatility patterns of SAN MIGUEL and OPERA SOFTWARE.
Diversification Opportunities for SAN MIGUEL and OPERA SOFTWARE
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between SAN and OPERA is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding SAN MIGUEL BREWERY and OPERA SOFTWARE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OPERA SOFTWARE 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 OPERA SOFTWARE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of OPERA SOFTWARE has no effect on the direction of SAN MIGUEL i.e., SAN MIGUEL and OPERA SOFTWARE go up and down completely randomly.
Pair Corralation between SAN MIGUEL and OPERA SOFTWARE
Assuming the 90 days trading horizon SAN MIGUEL BREWERY is expected to under-perform the OPERA SOFTWARE. In addition to that, SAN MIGUEL is 2.36 times more volatile than OPERA SOFTWARE. It trades about -0.07 of its total potential returns per unit of risk. OPERA SOFTWARE is currently generating about -0.05 per unit of volatility. If you would invest 65.00 in OPERA SOFTWARE on October 16, 2024 and sell it today you would lose (2.00) from holding OPERA SOFTWARE or give up 3.08% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SAN MIGUEL BREWERY vs. OPERA SOFTWARE
Performance |
| Timeline |
| SAN MIGUEL BREWERY |
| OPERA SOFTWARE |
SAN MIGUEL and OPERA SOFTWARE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SAN MIGUEL and OPERA SOFTWARE
The main advantage of trading using opposite SAN MIGUEL and OPERA SOFTWARE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SAN MIGUEL position performs unexpectedly, OPERA SOFTWARE 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 OPERA SOFTWARE will offset losses from the drop in OPERA SOFTWARE's long position.| SAN MIGUEL vs. FIRST SHIP LEASE | SAN MIGUEL vs. Insurance Australia Group | SAN MIGUEL vs. Safety Insurance Group | SAN MIGUEL vs. LIFENET INSURANCE CO |
| OPERA SOFTWARE vs. SAN MIGUEL BREWERY | OPERA SOFTWARE vs. Thai Beverage Public | OPERA SOFTWARE vs. Molson Coors Beverage | OPERA SOFTWARE vs. Suntory Beverage Food |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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