Correlation Between Anheuser Busch and Nextensa
Can any of the company-specific risk be diversified away by investing in both Anheuser Busch and Nextensa 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 Nextensa 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 Nextensa NV, you can compare the effects of market volatilities on Anheuser Busch and Nextensa 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 Nextensa. Check out your portfolio center. Please also check ongoing floating volatility patterns of Anheuser Busch and Nextensa.
Diversification Opportunities for Anheuser Busch and Nextensa
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Anheuser and Nextensa is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Anheuser Busch Inbev and Nextensa NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nextensa 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 Nextensa. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nextensa NV has no effect on the direction of Anheuser Busch i.e., Anheuser Busch and Nextensa go up and down completely randomly.
Pair Corralation between Anheuser Busch and Nextensa
Assuming the 90 days trading horizon Anheuser Busch Inbev is expected to under-perform the Nextensa. But the stock apears to be less risky and, when comparing its historical volatility, Anheuser Busch Inbev is 1.21 times less risky than Nextensa. The stock trades about -0.01 of its potential returns per unit of risk. The Nextensa NV is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 4,255 in Nextensa NV on September 3, 2024 and sell it today you would lose (245.00) from holding Nextensa NV or give up 5.76% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Anheuser Busch Inbev vs. Nextensa NV
Performance |
| Timeline |
| Anheuser Busch Inbev |
| Nextensa NV |
Anheuser Busch and Nextensa Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Anheuser Busch and Nextensa
The main advantage of trading using opposite Anheuser Busch and Nextensa positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Anheuser Busch position performs unexpectedly, Nextensa 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 Nextensa will offset losses from the drop in Nextensa's long position.| Anheuser Busch vs. ageas SANV | Anheuser Busch vs. Solvay SA | Anheuser Busch vs. KBC Groep NV | Anheuser Busch vs. Umicore SA |
| Nextensa vs. Exmar NV | Nextensa vs. Iep Invest | Nextensa vs. Unifiedpost Group SA | Nextensa vs. Montea CVA |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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