Correlation Between Insurance Australia and SAN MIGUEL
Can any of the company-specific risk be diversified away by investing in both Insurance Australia 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 Insurance Australia and SAN MIGUEL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Insurance Australia Group and SAN MIGUEL BREWERY, you can compare the effects of market volatilities on Insurance Australia 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 Insurance Australia with a short position of SAN MIGUEL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Insurance Australia and SAN MIGUEL.
Diversification Opportunities for Insurance Australia and SAN MIGUEL
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Insurance and SAN is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Insurance Australia Group 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 Insurance Australia 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 Insurance Australia Group 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 Insurance Australia i.e., Insurance Australia and SAN MIGUEL go up and down completely randomly.
Pair Corralation between Insurance Australia and SAN MIGUEL
Assuming the 90 days horizon Insurance Australia is expected to generate 2.58 times less return on investment than SAN MIGUEL. But when comparing it to its historical volatility, Insurance Australia Group is 3.95 times less risky than SAN MIGUEL. It trades about 0.09 of its potential returns per unit of risk. SAN MIGUEL BREWERY is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 4.24 in SAN MIGUEL BREWERY on October 30, 2024 and sell it today you would earn a total of 6.76 from holding SAN MIGUEL BREWERY or generate 159.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Insurance Australia Group vs. SAN MIGUEL BREWERY
Performance |
| Timeline |
| Insurance Australia |
| SAN MIGUEL BREWERY |
Insurance Australia and SAN MIGUEL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Insurance Australia and SAN MIGUEL
The main advantage of trading using opposite Insurance Australia and SAN MIGUEL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Insurance Australia 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.| Insurance Australia vs. Corporate Office Properties | Insurance Australia vs. Air Transport Services | Insurance Australia vs. Gaztransport Technigaz SA | Insurance Australia vs. NURAN WIRELESS INC |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
Other Complementary Tools
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing |