Correlation Between LIFENET INSURANCE and Anheuser Busch
Can any of the company-specific risk be diversified away by investing in both LIFENET INSURANCE and Anheuser Busch 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 LIFENET INSURANCE and Anheuser Busch into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LIFENET INSURANCE CO and Anheuser Busch InBev SANV, you can compare the effects of market volatilities on LIFENET INSURANCE and Anheuser Busch 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 LIFENET INSURANCE with a short position of Anheuser Busch. Check out your portfolio center. Please also check ongoing floating volatility patterns of LIFENET INSURANCE and Anheuser Busch.
Diversification Opportunities for LIFENET INSURANCE and Anheuser Busch
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between LIFENET and Anheuser is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding LIFENET INSURANCE CO 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 LIFENET INSURANCE 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 LIFENET INSURANCE CO are associated (or correlated) with Anheuser Busch. 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 LIFENET INSURANCE i.e., LIFENET INSURANCE and Anheuser Busch go up and down completely randomly.
Pair Corralation between LIFENET INSURANCE and Anheuser Busch
Assuming the 90 days horizon LIFENET INSURANCE CO is expected to generate 1.73 times more return on investment than Anheuser Busch. However, LIFENET INSURANCE is 1.73 times more volatile than Anheuser Busch InBev SANV. It trades about 0.11 of its potential returns per unit of risk. Anheuser Busch InBev SANV is currently generating about -0.03 per unit of risk. If you would invest 665.00 in LIFENET INSURANCE CO on September 4, 2024 and sell it today you would earn a total of 575.00 from holding LIFENET INSURANCE CO or generate 86.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
LIFENET INSURANCE CO vs. Anheuser Busch InBev SANV
Performance |
| Timeline |
| LIFENET INSURANCE |
| Anheuser Busch InBev |
LIFENET INSURANCE and Anheuser Busch Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LIFENET INSURANCE and Anheuser Busch
The main advantage of trading using opposite LIFENET INSURANCE and Anheuser Busch positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LIFENET INSURANCE position performs unexpectedly, Anheuser Busch 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 will offset losses from the drop in Anheuser Busch's long position.| LIFENET INSURANCE vs. Prudential plc | LIFENET INSURANCE vs. Wstenrot Wrttembergische AG | LIFENET INSURANCE vs. Gold Road Resources | LIFENET INSURANCE vs. Sumitomo Mitsui Construction |
| Anheuser Busch vs. Strategic Investments AS | Anheuser Busch vs. EAT WELL INVESTMENT | Anheuser Busch vs. SBI Insurance Group | Anheuser Busch vs. LIFENET INSURANCE CO |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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