Correlation Between Anheuser Busch and Nabors Industries
Can any of the company-specific risk be diversified away by investing in both Anheuser Busch and Nabors Industries 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 Nabors Industries 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 Nabors Industries, you can compare the effects of market volatilities on Anheuser Busch and Nabors Industries 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 Nabors Industries. Check out your portfolio center. Please also check ongoing floating volatility patterns of Anheuser Busch and Nabors Industries.
Diversification Opportunities for Anheuser Busch and Nabors Industries
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Anheuser and Nabors is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Anheuser Busch Inbev and Nabors Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nabors Industries 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 Nabors Industries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nabors Industries has no effect on the direction of Anheuser Busch i.e., Anheuser Busch and Nabors Industries go up and down completely randomly.
Pair Corralation between Anheuser Busch and Nabors Industries
Considering the 90-day investment horizon Anheuser Busch Inbev is expected to under-perform the Nabors Industries. But the stock apears to be less risky and, when comparing its historical volatility, Anheuser Busch Inbev is 2.34 times less risky than Nabors Industries. The stock trades about -0.5 of its potential returns per unit of risk. The Nabors Industries is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 7,017 in Nabors Industries on August 24, 2024 and sell it today you would earn a total of 526.00 from holding Nabors Industries or generate 7.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Anheuser Busch Inbev vs. Nabors Industries
Performance |
| Timeline |
| Anheuser Busch Inbev |
| Nabors Industries |
Anheuser Busch and Nabors Industries Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Anheuser Busch and Nabors Industries
The main advantage of trading using opposite Anheuser Busch and Nabors Industries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Anheuser Busch position performs unexpectedly, Nabors Industries 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 Nabors Industries will offset losses from the drop in Nabors Industries' long position.| Anheuser Busch vs. Boston Beer | Anheuser Busch vs. Molson Coors Beverage | Anheuser Busch vs. Heineken NV | Anheuser Busch vs. Ambev SA ADR |
| Nabors Industries vs. Helmerich and Payne | Nabors Industries vs. Precision Drilling | Nabors Industries vs. Seadrill Limited | Nabors Industries vs. Borr Drilling |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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