Correlation Between Renesas Electronics and SAN MIGUEL
Can any of the company-specific risk be diversified away by investing in both Renesas Electronics and SAN MIGUEL 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 Renesas Electronics and SAN MIGUEL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Renesas Electronics and SAN MIGUEL BREWERY, you can compare the effects of market volatilities on Renesas Electronics and SAN MIGUEL 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 Renesas Electronics with a short position of SAN MIGUEL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Renesas Electronics and SAN MIGUEL.
Diversification Opportunities for Renesas Electronics and SAN MIGUEL
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between Renesas and SAN is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Renesas Electronics and SAN MIGUEL BREWERY in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SAN MIGUEL BREWERY and Renesas Electronics 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 Renesas Electronics are associated (or correlated) with SAN MIGUEL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SAN MIGUEL BREWERY has no effect on the direction of Renesas Electronics i.e., Renesas Electronics and SAN MIGUEL go up and down completely randomly.
Pair Corralation between Renesas Electronics and SAN MIGUEL
Assuming the 90 days horizon Renesas Electronics is expected to under-perform the SAN MIGUEL. But the stock apears to be less risky and, when comparing its historical volatility, Renesas Electronics is 1.47 times less risky than SAN MIGUEL. The stock trades about -0.02 of its potential returns per unit of risk. The SAN MIGUEL BREWERY is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 12.00 in SAN MIGUEL BREWERY on October 26, 2024 and sell it today you would lose (1.00) from holding SAN MIGUEL BREWERY or give up 8.33% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Renesas Electronics vs. SAN MIGUEL BREWERY
Performance |
| Timeline |
| Renesas Electronics |
| SAN MIGUEL BREWERY |
Renesas Electronics and SAN MIGUEL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Renesas Electronics and SAN MIGUEL
The main advantage of trading using opposite Renesas Electronics and SAN MIGUEL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Renesas Electronics position performs unexpectedly, SAN MIGUEL 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 SAN MIGUEL will offset losses from the drop in SAN MIGUEL's long position.| Renesas Electronics vs. VITEC SOFTWARE GROUP | Renesas Electronics vs. TOMBADOR IRON LTD | Renesas Electronics vs. GBS Software AG | Renesas Electronics vs. Kingdee International Software |
| SAN MIGUEL vs. VARIOUS EATERIES LS | SAN MIGUEL vs. Renesas Electronics | SAN MIGUEL vs. Methode Electronics | SAN MIGUEL vs. OPERA SOFTWARE |
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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