Correlation Between San Miguel and ArthaLand Corp

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

By analyzing existing cross correlation between San Miguel Pure and ArthaLand Corp, you can compare the effects of market volatilities on San Miguel and ArthaLand Corp 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 ArthaLand Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of San Miguel and ArthaLand Corp.

Diversification Opportunities for San Miguel and ArthaLand Corp

0.75

Correlation Coefficient

San Miguel  ArthaLand Corp

Poor diversification

The 3 months correlation between San and ArthaLand is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding San Miguel Pure and ArthaLand Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ArthaLand Corp 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 Pure are associated (or correlated) with ArthaLand Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ArthaLand Corp has no effect on the direction of San Miguel i.e., San Miguel and ArthaLand Corp go up and down completely randomly.

Pair Corralation between San Miguel and ArthaLand Corp

Assuming the 90 days trading horizon San Miguel is expected to generate 7.77 times less return on investment than ArthaLand Corp. But when comparing it to its historical volatility, San Miguel Pure is 4.75 times less risky than ArthaLand Corp. It trades about 0.09 of its potential returns per unit of risk. ArthaLand Corp is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest  33.00  in ArthaLand Corp on April 20, 2025 and sell it today you would earn a total of  10.00  from holding ArthaLand Corp or generate 30.3% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	91.8%
Values	Daily Returns

San Miguel Pure  vs.  ArthaLand Corp

San Miguel Pure

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in San Miguel Pure are ranked lower than 6 (%) 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 latest stock price tumult, may contribute to shorter-term losses for the shareholders.

ArthaLand Corp

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in ArthaLand Corp are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, ArthaLand Corp unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with San Miguel and ArthaLand Corp

The main advantage of trading using opposite San Miguel and ArthaLand Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if San Miguel position performs unexpectedly, ArthaLand Corp 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 ArthaLand Corp will offset losses from the drop in ArthaLand Corp's long position.

The idea behind San Miguel Pure and ArthaLand Corp 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.

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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.