Correlation Between MidCap Financial and Anheuser-Busch InBev
Can any of the company-specific risk be diversified away by investing in both MidCap Financial and Anheuser-Busch InBev 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 MidCap Financial and Anheuser-Busch InBev into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MidCap Financial Investment and Anheuser Busch InBev SANV, you can compare the effects of market volatilities on MidCap Financial and Anheuser-Busch InBev 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 MidCap Financial with a short position of Anheuser-Busch InBev. Check out your portfolio center. Please also check ongoing floating volatility patterns of MidCap Financial and Anheuser-Busch InBev.
Diversification Opportunities for MidCap Financial and Anheuser-Busch InBev
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between MidCap and Anheuser-Busch is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding MidCap Financial Investment and Anheuser Busch InBev SANV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Anheuser Busch InBev and MidCap Financial 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 MidCap Financial Investment are associated (or correlated) with Anheuser-Busch InBev. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Anheuser Busch InBev has no effect on the direction of MidCap Financial i.e., MidCap Financial and Anheuser-Busch InBev go up and down completely randomly.
Pair Corralation between MidCap Financial and Anheuser-Busch InBev
Assuming the 90 days trading horizon MidCap Financial Investment is expected to generate 0.82 times more return on investment than Anheuser-Busch InBev. However, MidCap Financial Investment is 1.22 times less risky than Anheuser-Busch InBev. It trades about 0.07 of its potential returns per unit of risk. Anheuser Busch InBev SANV is currently generating about -0.01 per unit of risk. If you would invest 886.00 in MidCap Financial Investment on November 9, 2024 and sell it today you would earn a total of 456.00 from holding MidCap Financial Investment or generate 51.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
MidCap Financial Investment vs. Anheuser Busch InBev SANV
Performance |
| Timeline |
| MidCap Financial Inv |
| Anheuser Busch InBev |
MidCap Financial and Anheuser-Busch InBev Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MidCap Financial and Anheuser-Busch InBev
The main advantage of trading using opposite MidCap Financial and Anheuser-Busch InBev positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MidCap Financial position performs unexpectedly, Anheuser-Busch InBev 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 Anheuser-Busch InBev will offset losses from the drop in Anheuser-Busch InBev's long position.| MidCap Financial vs. ONWARD MEDICAL BV | MidCap Financial vs. Guangdong Investment Limited | MidCap Financial vs. HK Electric Investments | MidCap Financial vs. MEDICAL FACILITIES NEW |
| Anheuser-Busch InBev vs. COREBRIDGE FINANCIAL INC | Anheuser-Busch InBev vs. BANK OF CHINA | Anheuser-Busch InBev vs. Discover Financial Services | Anheuser-Busch InBev vs. DETALION GAMES SA |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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