Correlation Between San Miguel and Alaska Power
Can any of the company-specific risk be diversified away by investing in both San Miguel and Alaska Power 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 Alaska Power into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between San Miguel and Alaska Power Telephone, you can compare the effects of market volatilities on San Miguel and Alaska Power 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 Alaska Power. Check out your portfolio center. Please also check ongoing floating volatility patterns of San Miguel and Alaska Power.
Diversification Opportunities for San Miguel and Alaska Power
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between San and Alaska is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding San Miguel and Alaska Power Telephone in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alaska Power Telephone 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 are associated (or correlated) with Alaska Power. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alaska Power Telephone has no effect on the direction of San Miguel i.e., San Miguel and Alaska Power go up and down completely randomly.
Pair Corralation between San Miguel and Alaska Power
Assuming the 90 days horizon San Miguel is expected to generate 13.02 times more return on investment than Alaska Power. However, San Miguel is 13.02 times more volatile than Alaska Power Telephone. It trades about 0.05 of its potential returns per unit of risk. Alaska Power Telephone is currently generating about -0.02 per unit of risk. If you would invest 145.00 in San Miguel on August 27, 2024 and sell it today you would earn a total of 17.00 from holding San Miguel or generate 11.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 98.82% |
| Values | Daily Returns |
San Miguel vs. Alaska Power Telephone
Performance |
| Timeline |
| San Miguel |
| Alaska Power Telephone |
San Miguel and Alaska Power Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with San Miguel and Alaska Power
The main advantage of trading using opposite San Miguel and Alaska Power positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if San Miguel position performs unexpectedly, Alaska Power 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 Alaska Power will offset losses from the drop in Alaska Power's long position.The idea behind San Miguel and Alaska Power Telephone 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.| Alaska Power vs. Alliance Recovery | Alaska Power vs. Ayala | Alaska Power vs. Alliance Global Group | Alaska Power vs. RCABS 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
Other Complementary Tools
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance |