Correlation Between Anheuser Busch and CITY OFFICE
Can any of the company-specific risk be diversified away by investing in both Anheuser Busch and CITY OFFICE 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 CITY OFFICE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Anheuser Busch InBev SANV and CITY OFFICE REIT, you can compare the effects of market volatilities on Anheuser Busch and CITY OFFICE 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 CITY OFFICE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Anheuser Busch and CITY OFFICE.
Diversification Opportunities for Anheuser Busch and CITY OFFICE
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Anheuser and CITY is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Anheuser Busch InBev SANV and CITY OFFICE REIT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CITY OFFICE REIT 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 SANV are associated (or correlated) with CITY OFFICE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CITY OFFICE REIT has no effect on the direction of Anheuser Busch i.e., Anheuser Busch and CITY OFFICE go up and down completely randomly.
Pair Corralation between Anheuser Busch and CITY OFFICE
Assuming the 90 days trading horizon Anheuser Busch InBev SANV is expected to under-perform the CITY OFFICE. But the stock apears to be less risky and, when comparing its historical volatility, Anheuser Busch InBev SANV is 2.26 times less risky than CITY OFFICE. The stock trades about -0.25 of its potential returns per unit of risk. The CITY OFFICE REIT is currently generating about 0.26 of returns per unit of risk over similar time horizon. If you would invest 438.00 in CITY OFFICE REIT on September 3, 2024 and sell it today you would earn a total of 87.00 from holding CITY OFFICE REIT or generate 19.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Anheuser Busch InBev SANV vs. CITY OFFICE REIT
Performance |
| Timeline |
| Anheuser Busch InBev |
| CITY OFFICE REIT |
Anheuser Busch and CITY OFFICE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Anheuser Busch and CITY OFFICE
The main advantage of trading using opposite Anheuser Busch and CITY OFFICE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Anheuser Busch position performs unexpectedly, CITY OFFICE 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 CITY OFFICE will offset losses from the drop in CITY OFFICE's long position.| Anheuser Busch vs. Sqs Software Quality | Anheuser Busch vs. Corporate Office Properties | Anheuser Busch vs. CITY OFFICE REIT | Anheuser Busch vs. Take Two Interactive Software |
| CITY OFFICE vs. Boston Properties | CITY OFFICE vs. COUSINS PTIES INC | CITY OFFICE vs. Office Properties Income | CITY OFFICE vs. CREMECOMTRSBI DL 001 |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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