Correlation Between Anheuser Busch and Fomento Económico
Can any of the company-specific risk be diversified away by investing in both Anheuser Busch and Fomento Económico 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 Fomento Económico 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 Fomento Econmico Mexicano, you can compare the effects of market volatilities on Anheuser Busch and Fomento Económico 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 Fomento Económico. Check out your portfolio center. Please also check ongoing floating volatility patterns of Anheuser Busch and Fomento Económico.
Diversification Opportunities for Anheuser Busch and Fomento Económico
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Anheuser and Fomento is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Anheuser Busch InBev SANV and Fomento Econmico Mexicano in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fomento Econmico Mexicano 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 Fomento Económico. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fomento Econmico Mexicano has no effect on the direction of Anheuser Busch i.e., Anheuser Busch and Fomento Económico go up and down completely randomly.
Pair Corralation between Anheuser Busch and Fomento Económico
Assuming the 90 days trading horizon Anheuser Busch InBev SANV is expected to generate 0.86 times more return on investment than Fomento Económico. However, Anheuser Busch InBev SANV is 1.16 times less risky than Fomento Económico. It trades about -0.03 of its potential returns per unit of risk. Fomento Econmico Mexicano is currently generating about -0.06 per unit of risk. If you would invest 5,757 in Anheuser Busch InBev SANV on September 4, 2024 and sell it today you would lose (757.00) from holding Anheuser Busch InBev SANV or give up 13.15% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Anheuser Busch InBev SANV vs. Fomento Econmico Mexicano
Performance |
| Timeline |
| Anheuser Busch InBev |
| Fomento Econmico Mexicano |
Anheuser Busch and Fomento Económico Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Anheuser Busch and Fomento Económico
The main advantage of trading using opposite Anheuser Busch and Fomento Económico positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Anheuser Busch position performs unexpectedly, Fomento Económico 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 Fomento Económico will offset losses from the drop in Fomento Económico's long position.| Anheuser Busch vs. Strategic Investments AS | Anheuser Busch vs. EAT WELL INVESTMENT | Anheuser Busch vs. SBI Insurance Group | Anheuser Busch vs. LIFENET INSURANCE CO |
| Fomento Económico vs. Anheuser Busch InBev SANV | Fomento Económico vs. China Resources Beer | Fomento Económico vs. Royal Unibrew AS |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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