Correlation Between AC Energy and San Miguel

Can any of the company-specific risk be diversified away by investing in both AC Energy 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 AC Energy and San Miguel into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between AC Energy Philippines and San Miguel Pure, you can compare the effects of market volatilities on AC Energy 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 AC Energy with a short position of San Miguel. Check out your portfolio center. Please also check ongoing floating volatility patterns of AC Energy and San Miguel.

Diversification Opportunities for AC Energy and San Miguel

-0.4

Correlation Coefficient

AC Energy  San Miguel

Very good diversification

The 3 months correlation between ACEN and San is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding AC Energy Philippines and San Miguel Pure in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on San Miguel Pure and AC Energy 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 AC Energy Philippines 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 Pure has no effect on the direction of AC Energy i.e., AC Energy and San Miguel go up and down completely randomly.

Pair Corralation between AC Energy and San Miguel

Assuming the 90 days trading horizon AC Energy Philippines is expected to under-perform the San Miguel. In addition to that, AC Energy is 1.41 times more volatile than San Miguel Pure. It trades about -0.35 of its total potential returns per unit of risk. San Miguel Pure is currently generating about -0.04 per unit of volatility. If you would invest  5,381  in San Miguel Pure on September 12, 2024 and sell it today you would lose (106.00) from holding San Miguel Pure or give up 1.97% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

AC Energy Philippines  vs.  San Miguel Pure

AC Energy Philippines

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days AC Energy Philippines has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

San Miguel Pure

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in San Miguel Pure are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound basic indicators, San Miguel is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with AC Energy and San Miguel

The main advantage of trading using opposite AC Energy and San Miguel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AC Energy 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.

The idea behind AC Energy Philippines and San Miguel Pure 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.

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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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.