Correlation Between SAN MIGUEL and Ping An

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Can any of the company-specific risk be diversified away by investing in both SAN MIGUEL and Ping An 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 Ping An 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 Ping An Insurance, you can compare the effects of market volatilities on SAN MIGUEL and Ping An 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 Ping An. Check out your portfolio center. Please also check ongoing floating volatility patterns of SAN MIGUEL and Ping An.

Diversification Opportunities for SAN MIGUEL and Ping An

0.29
  Correlation Coefficient

Modest diversification

The 3 months correlation between SAN and Ping is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding SAN MIGUEL BREWERY and Ping An Insurance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ping An Insurance 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 Ping An. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ping An Insurance has no effect on the direction of SAN MIGUEL i.e., SAN MIGUEL and Ping An go up and down completely randomly.

Pair Corralation between SAN MIGUEL and Ping An

Assuming the 90 days trading horizon SAN MIGUEL BREWERY is expected to generate 0.81 times more return on investment than Ping An. However, SAN MIGUEL BREWERY is 1.23 times less risky than Ping An. It trades about 0.01 of its potential returns per unit of risk. Ping An Insurance is currently generating about -0.23 per unit of risk. If you would invest  10.00  in SAN MIGUEL BREWERY on October 24, 2024 and sell it today you would earn a total of  0.00  from holding SAN MIGUEL BREWERY or generate 0.0% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

SAN MIGUEL BREWERY  vs.  Ping An Insurance

 Performance 
       Timeline  
SAN MIGUEL BREWERY 

Risk-Adjusted Performance

1 of 100

 
Weak
 
Strong
Very Weak
Compared to the overall equity markets, risk-adjusted returns on investments in SAN MIGUEL BREWERY are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound basic indicators, SAN MIGUEL is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.
Ping An Insurance 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Ping An Insurance has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

SAN MIGUEL and Ping An Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with SAN MIGUEL and Ping An

The main advantage of trading using opposite SAN MIGUEL and Ping An positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SAN MIGUEL position performs unexpectedly, Ping An 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 Ping An will offset losses from the drop in Ping An's long position.
The idea behind SAN MIGUEL BREWERY and Ping An Insurance pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.

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