Correlation Between Anheuser Busch and Bpost NV
Can any of the company-specific risk be diversified away by investing in both Anheuser Busch and Bpost NV 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 Anheuser Busch and Bpost NV into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Anheuser Busch Inbev and Bpost NV, you can compare the effects of market volatilities on Anheuser Busch and Bpost NV 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 Anheuser Busch with a short position of Bpost NV. Check out your portfolio center. Please also check ongoing floating volatility patterns of Anheuser Busch and Bpost NV.
Diversification Opportunities for Anheuser Busch and Bpost NV
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Anheuser and Bpost is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Anheuser Busch Inbev and Bpost NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bpost NV and Anheuser Busch 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 Anheuser Busch Inbev are associated (or correlated) with Bpost NV. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bpost NV has no effect on the direction of Anheuser Busch i.e., Anheuser Busch and Bpost NV go up and down completely randomly.
Pair Corralation between Anheuser Busch and Bpost NV
Assuming the 90 days trading horizon Anheuser Busch Inbev is expected to generate 0.52 times more return on investment than Bpost NV. However, Anheuser Busch Inbev is 1.92 times less risky than Bpost NV. It trades about 0.0 of its potential returns per unit of risk. Bpost NV is currently generating about -0.07 per unit of risk. If you would invest 5,503 in Anheuser Busch Inbev on August 27, 2024 and sell it today you would lose (245.00) from holding Anheuser Busch Inbev or give up 4.45% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Anheuser Busch Inbev vs. Bpost NV
Performance |
Timeline |
Anheuser Busch Inbev |
Bpost NV |
Anheuser Busch and Bpost NV Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Anheuser Busch and Bpost NV
The main advantage of trading using opposite Anheuser Busch and Bpost NV positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Anheuser Busch position performs unexpectedly, Bpost NV 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 Bpost NV will offset losses from the drop in Bpost NV's long position.Anheuser Busch vs. ageas SANV | Anheuser Busch vs. Solvay SA | Anheuser Busch vs. KBC Groep NV | Anheuser Busch vs. Umicore SA |
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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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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