Correlation Between Anheuser Busch and Brederode
Can any of the company-specific risk be diversified away by investing in both Anheuser Busch and Brederode 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 Brederode 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 Brederode SA, you can compare the effects of market volatilities on Anheuser Busch and Brederode 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 Brederode. Check out your portfolio center. Please also check ongoing floating volatility patterns of Anheuser Busch and Brederode.
Diversification Opportunities for Anheuser Busch and Brederode
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Anheuser and Brederode is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Anheuser Busch Inbev and Brederode SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brederode SA 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 Brederode. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Brederode SA has no effect on the direction of Anheuser Busch i.e., Anheuser Busch and Brederode go up and down completely randomly.
Pair Corralation between Anheuser Busch and Brederode
Assuming the 90 days trading horizon Anheuser Busch Inbev is expected to under-perform the Brederode. In addition to that, Anheuser Busch is 1.5 times more volatile than Brederode SA. It trades about -0.12 of its total potential returns per unit of risk. Brederode SA is currently generating about 0.44 per unit of volatility. If you would invest 10,760 in Brederode SA on October 24, 2024 and sell it today you would earn a total of 920.00 from holding Brederode SA or generate 8.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Anheuser Busch Inbev vs. Brederode SA
Performance |
| Timeline |
| Anheuser Busch Inbev |
| Brederode SA |
Anheuser Busch and Brederode Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Anheuser Busch and Brederode
The main advantage of trading using opposite Anheuser Busch and Brederode positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Anheuser Busch position performs unexpectedly, Brederode 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 Brederode will offset losses from the drop in Brederode's long position.| Anheuser Busch vs. ageas SANV | Anheuser Busch vs. Solvay SA | Anheuser Busch vs. KBC Groep NV | Anheuser Busch vs. Umicore SA |
| Brederode vs. Retail Estates | Brederode vs. Keyware Technologies NV | Brederode vs. Shurgard Self Storage | Brederode vs. Home Invest Belgium |
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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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