Correlation Between ING Groep and Anheuser Busch
Can any of the company-specific risk be diversified away by investing in both ING Groep 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 ING Groep and Anheuser Busch into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ING Groep NV and Anheuser Busch Inbev, you can compare the effects of market volatilities on ING Groep 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 ING Groep with a short position of Anheuser Busch. Check out your portfolio center. Please also check ongoing floating volatility patterns of ING Groep and Anheuser Busch.
Diversification Opportunities for ING Groep and Anheuser Busch
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between ING and Anheuser is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding ING Groep NV 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 ING Groep 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 ING Groep NV 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 ING Groep i.e., ING Groep and Anheuser Busch go up and down completely randomly.
Pair Corralation between ING Groep and Anheuser Busch
Assuming the 90 days trading horizon ING Groep NV is expected to generate 0.56 times more return on investment than Anheuser Busch. However, ING Groep NV is 1.78 times less risky than Anheuser Busch. It trades about 0.09 of its potential returns per unit of risk. Anheuser Busch Inbev is currently generating about 0.02 per unit of risk. If you would invest 660.00 in ING Groep NV on August 26, 2024 and sell it today you would earn a total of 138.00 from holding ING Groep NV or generate 20.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 99.12% |
| Values | Daily Returns |
ING Groep NV vs. Anheuser Busch Inbev
Performance |
| Timeline |
| ING Groep NV |
| Anheuser Busch Inbev |
ING Groep and Anheuser Busch Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ING Groep and Anheuser Busch
The main advantage of trading using opposite ING Groep and Anheuser Busch positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ING Groep 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.The idea behind ING Groep NV and Anheuser Busch Inbev pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Anheuser Busch vs. Brederode SA | Anheuser Busch vs. Compagnie du Bois | Anheuser Busch vs. Ackermans Van Haaren | Anheuser Busch vs. Sofina Socit Anonyme |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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