Correlation Between BW Offshore and Anheuser Busch
Can any of the company-specific risk be diversified away by investing in both BW Offshore and Anheuser Busch 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 BW Offshore and Anheuser Busch into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BW Offshore Limited and Anheuser Busch Inbev, you can compare the effects of market volatilities on BW Offshore and Anheuser Busch 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 BW Offshore with a short position of Anheuser Busch. Check out your portfolio center. Please also check ongoing floating volatility patterns of BW Offshore and Anheuser Busch.
Diversification Opportunities for BW Offshore and Anheuser Busch
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between BWOFY and Anheuser is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding BW Offshore Limited and Anheuser Busch Inbev in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Anheuser Busch Inbev and BW Offshore 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 BW Offshore Limited are associated (or correlated) with Anheuser Busch. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Anheuser Busch Inbev has no effect on the direction of BW Offshore i.e., BW Offshore and Anheuser Busch go up and down completely randomly.
Pair Corralation between BW Offshore and Anheuser Busch
Assuming the 90 days horizon BW Offshore Limited is expected to generate 1.06 times more return on investment than Anheuser Busch. However, BW Offshore is 1.06 times more volatile than Anheuser Busch Inbev. It trades about 0.07 of its potential returns per unit of risk. Anheuser Busch Inbev is currently generating about -0.01 per unit of risk. If you would invest 412.00 in BW Offshore Limited on September 12, 2024 and sell it today you would earn a total of 143.00 from holding BW Offshore Limited or generate 34.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.72% |
| Values | Daily Returns |
BW Offshore Limited vs. Anheuser Busch Inbev
Performance |
| Timeline |
| BW Offshore Limited |
| Anheuser Busch Inbev |
BW Offshore and Anheuser Busch Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BW Offshore and Anheuser Busch
The main advantage of trading using opposite BW Offshore and Anheuser Busch positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BW Offshore position performs unexpectedly, Anheuser Busch 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 Anheuser Busch will offset losses from the drop in Anheuser Busch's long position.| BW Offshore vs. Legacy Education | BW Offshore vs. Apple Inc | BW Offshore vs. NVIDIA | BW Offshore vs. Microsoft |
| Anheuser Busch vs. Boston Beer | Anheuser Busch vs. Molson Coors Beverage | Anheuser Busch vs. Heineken NV | Anheuser Busch vs. Ambev SA ADR |
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.
Other Complementary Tools
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon |