Correlation Between San Miguel and DMCI Holdings
Can any of the company-specific risk be diversified away by investing in both San Miguel and DMCI Holdings 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 DMCI Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between San Miguel and DMCI Holdings ADR, you can compare the effects of market volatilities on San Miguel and DMCI Holdings 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 DMCI Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of San Miguel and DMCI Holdings.
Diversification Opportunities for San Miguel and DMCI Holdings
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between San and DMCI is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding San Miguel and DMCI Holdings ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DMCI Holdings ADR 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 DMCI Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DMCI Holdings ADR has no effect on the direction of San Miguel i.e., San Miguel and DMCI Holdings go up and down completely randomly.
Pair Corralation between San Miguel and DMCI Holdings
If you would invest 138.00 in San Miguel on August 31, 2024 and sell it today you would earn a total of 24.00 from holding San Miguel or generate 17.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 4.55% |
| Values | Daily Returns |
San Miguel vs. DMCI Holdings ADR
Performance |
| Timeline |
| San Miguel |
| DMCI Holdings ADR |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
San Miguel and DMCI Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with San Miguel and DMCI Holdings
The main advantage of trading using opposite San Miguel and DMCI Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if San Miguel position performs unexpectedly, DMCI Holdings 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 DMCI Holdings will offset losses from the drop in DMCI Holdings' long position.The idea behind San Miguel and DMCI Holdings ADR 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.| DMCI Holdings vs. San Miguel | DMCI Holdings vs. Ayala | DMCI Holdings vs. Teijin | DMCI Holdings vs. Alliance Global 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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