Correlation Between San Miguel and Molinos Juan
Can any of the company-specific risk be diversified away by investing in both San Miguel and Molinos Juan 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 Molinos Juan into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between San Miguel AG and Molinos Juan Semino, you can compare the effects of market volatilities on San Miguel and Molinos Juan 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 Molinos Juan. Check out your portfolio center. Please also check ongoing floating volatility patterns of San Miguel and Molinos Juan.
Diversification Opportunities for San Miguel and Molinos Juan
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between San and Molinos is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding San Miguel AG and Molinos Juan Semino in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Molinos Juan Semino 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 AG are associated (or correlated) with Molinos Juan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Molinos Juan Semino has no effect on the direction of San Miguel i.e., San Miguel and Molinos Juan go up and down completely randomly.
Pair Corralation between San Miguel and Molinos Juan
Assuming the 90 days trading horizon San Miguel AG is expected to generate 0.9 times more return on investment than Molinos Juan. However, San Miguel AG is 1.12 times less risky than Molinos Juan. It trades about -0.1 of its potential returns per unit of risk. Molinos Juan Semino is currently generating about -0.22 per unit of risk. If you would invest 131,500 in San Miguel AG on November 2, 2024 and sell it today you would lose (10,000) from holding San Miguel AG or give up 7.6% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
San Miguel AG vs. Molinos Juan Semino
Performance |
| Timeline |
| San Miguel AG |
| Molinos Juan Semino |
San Miguel and Molinos Juan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with San Miguel and Molinos Juan
The main advantage of trading using opposite San Miguel and Molinos Juan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if San Miguel position performs unexpectedly, Molinos Juan 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 Molinos Juan will offset losses from the drop in Molinos Juan's long position.| San Miguel vs. Compania de Transporte | San Miguel vs. Agrometal SAI | San Miguel vs. Harmony Gold Mining | San Miguel vs. Transportadora de Gas |
| Molinos Juan vs. Ledesma SAAI | Molinos Juan vs. Boldt SA | Molinos Juan vs. Agrometal SAI | Molinos Juan vs. United States Steel |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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