Correlation Between Dow Jones and Anheuser-Busch InBev
Can any of the company-specific risk be diversified away by investing in both Dow Jones and Anheuser-Busch InBev 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 Dow Jones and Anheuser-Busch InBev into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dow Jones Industrial and Anheuser Busch InBev SANV, you can compare the effects of market volatilities on Dow Jones and Anheuser-Busch InBev 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 Dow Jones with a short position of Anheuser-Busch InBev. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dow Jones and Anheuser-Busch InBev.
Diversification Opportunities for Dow Jones and Anheuser-Busch InBev
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Dow and Anheuser-Busch is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Dow Jones Industrial and Anheuser Busch InBev SANV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Anheuser Busch InBev and Dow Jones 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 Dow Jones Industrial are associated (or correlated) with Anheuser-Busch InBev. 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 Dow Jones i.e., Dow Jones and Anheuser-Busch InBev go up and down completely randomly.
Pair Corralation between Dow Jones and Anheuser-Busch InBev
Assuming the 90 days trading horizon Dow Jones Industrial is expected to generate 0.52 times more return on investment than Anheuser-Busch InBev. However, Dow Jones Industrial is 1.93 times less risky than Anheuser-Busch InBev. It trades about 0.15 of its potential returns per unit of risk. Anheuser Busch InBev SANV is currently generating about -0.38 per unit of risk. If you would invest 4,251,495 in Dow Jones Industrial on August 24, 2024 and sell it today you would earn a total of 135,540 from holding Dow Jones Industrial or generate 3.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Dow Jones Industrial vs. Anheuser Busch InBev SANV
Performance |
| Timeline |
Dow Jones and Anheuser-Busch InBev Volatility Contrast
Predicted Return Density |
| Returns |
Dow Jones Industrial
Pair trading matchups for Dow Jones
Anheuser Busch InBev SANV
Pair trading matchups for Anheuser-Busch InBev
Pair Trading with Dow Jones and Anheuser-Busch InBev
The main advantage of trading using opposite Dow Jones and Anheuser-Busch InBev positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dow Jones position performs unexpectedly, Anheuser-Busch InBev 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 InBev will offset losses from the drop in Anheuser-Busch InBev's long position.| Dow Jones vs. Sphere Entertainment Co | Dow Jones vs. Perseus Mining Limited | Dow Jones vs. Titan Machinery | Dow Jones vs. Simon Property Group |
| Anheuser-Busch InBev vs. Barfresh Food Group | Anheuser-Busch InBev vs. Fbec Worldwide | Anheuser-Busch InBev vs. Flow Beverage Corp | Anheuser-Busch InBev vs. Eq Energy Drink |
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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
Other Complementary Tools
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio |