Correlation Between Anheuser Busch and China Eastern
Can any of the company-specific risk be diversified away by investing in both Anheuser Busch and China Eastern 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 China Eastern 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 China Eastern Airlines, you can compare the effects of market volatilities on Anheuser Busch and China Eastern 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 China Eastern. Check out your portfolio center. Please also check ongoing floating volatility patterns of Anheuser Busch and China Eastern.
Diversification Opportunities for Anheuser Busch and China Eastern
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Anheuser and China is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Anheuser Busch Inbev and China Eastern Airlines in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Eastern Airlines 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 China Eastern. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Eastern Airlines has no effect on the direction of Anheuser Busch i.e., Anheuser Busch and China Eastern go up and down completely randomly.
Pair Corralation between Anheuser Busch and China Eastern
If you would invest 1,998 in China Eastern Airlines on September 13, 2024 and sell it today you would earn a total of 0.00 from holding China Eastern Airlines or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 4.76% |
| Values | Daily Returns |
Anheuser Busch Inbev vs. China Eastern Airlines
Performance |
| Timeline |
| Anheuser Busch Inbev |
| China Eastern Airlines |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Anheuser Busch and China Eastern Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Anheuser Busch and China Eastern
The main advantage of trading using opposite Anheuser Busch and China Eastern positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Anheuser Busch position performs unexpectedly, China Eastern 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 China Eastern will offset losses from the drop in China Eastern'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 |
| China Eastern vs. The Coca Cola | China Eastern vs. Anheuser Busch Inbev | China Eastern vs. SNDL Inc | China Eastern vs. Playstudios |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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