Correlation Between Anheuser Busch and Lenzing Aktiengesellscha
Can any of the company-specific risk be diversified away by investing in both Anheuser Busch and Lenzing Aktiengesellscha 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 Lenzing Aktiengesellscha into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Anheuser Busch InBev SANV and Lenzing Aktiengesellschaft, you can compare the effects of market volatilities on Anheuser Busch and Lenzing Aktiengesellscha 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 Lenzing Aktiengesellscha. Check out your portfolio center. Please also check ongoing floating volatility patterns of Anheuser Busch and Lenzing Aktiengesellscha.
Diversification Opportunities for Anheuser Busch and Lenzing Aktiengesellscha
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Anheuser and Lenzing is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Anheuser Busch InBev SANV and Lenzing Aktiengesellschaft in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lenzing Aktiengesellscha 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 SANV are associated (or correlated) with Lenzing Aktiengesellscha. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lenzing Aktiengesellscha has no effect on the direction of Anheuser Busch i.e., Anheuser Busch and Lenzing Aktiengesellscha go up and down completely randomly.
Pair Corralation between Anheuser Busch and Lenzing Aktiengesellscha
Assuming the 90 days trading horizon Anheuser Busch InBev SANV is expected to under-perform the Lenzing Aktiengesellscha. But the stock apears to be less risky and, when comparing its historical volatility, Anheuser Busch InBev SANV is 1.0 times less risky than Lenzing Aktiengesellscha. The stock trades about -0.34 of its potential returns per unit of risk. The Lenzing Aktiengesellschaft is currently generating about -0.25 of returns per unit of risk over similar time horizon. If you would invest 3,275 in Lenzing Aktiengesellschaft on August 25, 2024 and sell it today you would lose (320.00) from holding Lenzing Aktiengesellschaft or give up 9.77% 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 SANV vs. Lenzing Aktiengesellschaft
Performance |
| Timeline |
| Anheuser Busch InBev |
| Lenzing Aktiengesellscha |
Anheuser Busch and Lenzing Aktiengesellscha Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Anheuser Busch and Lenzing Aktiengesellscha
The main advantage of trading using opposite Anheuser Busch and Lenzing Aktiengesellscha positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Anheuser Busch position performs unexpectedly, Lenzing Aktiengesellscha 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 Lenzing Aktiengesellscha will offset losses from the drop in Lenzing Aktiengesellscha's long position.| Anheuser Busch vs. AMAG Austria Metall | Anheuser Busch vs. CNH Industrial NV | Anheuser Busch vs. UNIQA Insurance Group | Anheuser Busch vs. Oberbank AG |
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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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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