Correlation Between SAN MIGUEL and Thai Beverage

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

Diversification Opportunities for SAN MIGUEL and Thai Beverage

SANThaiDiversified AwaySANThaiDiversified Away100%
-0.16
  Correlation Coefficient

Good diversification

The 3 months correlation between SAN and Thai is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding SAN MIGUEL BREWERY and Thai Beverage Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thai Beverage Public 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 Thai Beverage. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thai Beverage Public has no effect on the direction of SAN MIGUEL i.e., SAN MIGUEL and Thai Beverage go up and down completely randomly.

Pair Corralation between SAN MIGUEL and Thai Beverage

Assuming the 90 days trading horizon SAN MIGUEL is expected to generate 2.26 times less return on investment than Thai Beverage. In addition to that, SAN MIGUEL is 1.33 times more volatile than Thai Beverage Public. It trades about 0.01 of its total potential returns per unit of risk. Thai Beverage Public is currently generating about 0.03 per unit of volatility. If you would invest  31.00  in Thai Beverage Public on November 24, 2024 and sell it today you would earn a total of  4.00  from holding Thai Beverage Public or generate 12.9% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

SAN MIGUEL BREWERY  vs.  Thai Beverage Public

 Performance 
JavaScript chart by amCharts 3.21.15Dec2025Feb -10-5051015
JavaScript chart by amCharts 3.21.15MBR T6W
       Timeline  
SAN MIGUEL BREWERY 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days SAN MIGUEL BREWERY has generated negative risk-adjusted returns adding no value to investors with long positions. 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.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb0.0950.10.1050.110.1150.12
Thai Beverage Public 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days Thai Beverage Public has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Thai Beverage is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb0.350.360.370.380.390.40.41

SAN MIGUEL and Thai Beverage Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-6.16-4.61-3.07-1.52-0.02531.472.994.516.027.54 0.0250.0300.0350.040
JavaScript chart by amCharts 3.21.15MBR T6W
       Returns  

Pair Trading with SAN MIGUEL and Thai Beverage

The main advantage of trading using opposite SAN MIGUEL and Thai Beverage positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SAN MIGUEL position performs unexpectedly, Thai Beverage 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 Thai Beverage will offset losses from the drop in Thai Beverage's long position.
The idea behind SAN MIGUEL BREWERY and Thai Beverage Public 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.

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