Correlation Between Safety Insurance and SAN MIGUEL
Can any of the company-specific risk be diversified away by investing in both Safety Insurance 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 Safety Insurance and SAN MIGUEL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Safety Insurance Group and SAN MIGUEL BREWERY, you can compare the effects of market volatilities on Safety Insurance 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 Safety Insurance with a short position of SAN MIGUEL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Safety Insurance and SAN MIGUEL.
Diversification Opportunities for Safety Insurance and SAN MIGUEL
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between Safety and SAN is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Safety Insurance 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 Safety Insurance 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 Safety Insurance 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 Safety Insurance i.e., Safety Insurance and SAN MIGUEL go up and down completely randomly.
Pair Corralation between Safety Insurance and SAN MIGUEL
Assuming the 90 days horizon Safety Insurance is expected to generate 33.75 times less return on investment than SAN MIGUEL. But when comparing it to its historical volatility, Safety Insurance Group is 3.92 times less risky than SAN MIGUEL. It trades about 0.01 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 | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Safety Insurance Group vs. SAN MIGUEL BREWERY
Performance |
| Timeline |
| Safety Insurance |
| SAN MIGUEL BREWERY |
Safety Insurance and SAN MIGUEL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Safety Insurance and SAN MIGUEL
The main advantage of trading using opposite Safety Insurance and SAN MIGUEL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Safety Insurance 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.| Safety Insurance vs. PICC Property and | Safety Insurance vs. Fairfax Financial Holdings | Safety Insurance vs. QBE Insurance Group | Safety Insurance vs. Insurance Australia Group |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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