Correlation Between Anheuser Busch and Carlsberg A/S
Can any of the company-specific risk be diversified away by investing in both Anheuser Busch and Carlsberg A/S 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 Carlsberg A/S 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 Carlsberg AS, you can compare the effects of market volatilities on Anheuser Busch and Carlsberg A/S 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 Carlsberg A/S. Check out your portfolio center. Please also check ongoing floating volatility patterns of Anheuser Busch and Carlsberg A/S.
Diversification Opportunities for Anheuser Busch and Carlsberg A/S
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Anheuser and Carlsberg is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Anheuser Busch Inbev and Carlsberg AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Carlsberg A/S 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 Carlsberg A/S. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Carlsberg A/S has no effect on the direction of Anheuser Busch i.e., Anheuser Busch and Carlsberg A/S go up and down completely randomly.
Pair Corralation between Anheuser Busch and Carlsberg A/S
Considering the 90-day investment horizon Anheuser Busch Inbev is expected to generate 0.4 times more return on investment than Carlsberg A/S. However, Anheuser Busch Inbev is 2.51 times less risky than Carlsberg A/S. It trades about -0.08 of its potential returns per unit of risk. Carlsberg AS is currently generating about -0.06 per unit of risk. If you would invest 6,265 in Anheuser Busch Inbev on August 30, 2024 and sell it today you would lose (857.00) from holding Anheuser Busch Inbev or give up 13.68% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Anheuser Busch Inbev vs. Carlsberg AS
Performance |
| Timeline |
| Anheuser Busch Inbev |
| Carlsberg A/S |
Anheuser Busch and Carlsberg A/S Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Anheuser Busch and Carlsberg A/S
The main advantage of trading using opposite Anheuser Busch and Carlsberg A/S positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Anheuser Busch position performs unexpectedly, Carlsberg A/S 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 Carlsberg A/S will offset losses from the drop in Carlsberg A/S's long position.| Anheuser Busch vs. Boston Beer | Anheuser Busch vs. Molson Coors Beverage | Anheuser Busch vs. Heineken NV | Anheuser Busch vs. Ambev SA ADR |
| Carlsberg A/S vs. Heineken NV | Carlsberg A/S vs. Anheuser Busch Inbev | Carlsberg A/S vs. Compania Cervecerias Unidas | Carlsberg A/S vs. Boston Beer |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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