Correlation Between JD and Anheuser Busch
Can any of the company-specific risk be diversified away by investing in both JD 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 JD and Anheuser Busch into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between JD Inc and Anheuser Busch InBev SANV, you can compare the effects of market volatilities on JD 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 JD with a short position of Anheuser Busch. Check out your portfolio center. Please also check ongoing floating volatility patterns of JD and Anheuser Busch.
Diversification Opportunities for JD and Anheuser Busch
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between JD and Anheuser is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding JD Inc 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 JD 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 JD Inc 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 JD i.e., JD and Anheuser Busch go up and down completely randomly.
Pair Corralation between JD and Anheuser Busch
Assuming the 90 days horizon JD Inc is expected to generate 1.53 times more return on investment than Anheuser Busch. However, JD is 1.53 times more volatile than Anheuser Busch InBev SANV. It trades about -0.15 of its potential returns per unit of risk. Anheuser Busch InBev SANV is currently generating about -0.35 per unit of risk. If you would invest 3,740 in JD Inc on August 24, 2024 and sell it today you would lose (350.00) from holding JD Inc or give up 9.36% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
JD Inc vs. Anheuser Busch InBev SANV
Performance |
| Timeline |
| JD Inc |
| Anheuser Busch InBev |
JD and Anheuser Busch Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JD and Anheuser Busch
The main advantage of trading using opposite JD and Anheuser Busch positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JD 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.| JD vs. UNIQA Insurance Group | JD vs. Wiener Privatbank SE | JD vs. CNH Industrial NV | JD vs. Erste Group Bank |
| Anheuser Busch vs. AT S Austria | Anheuser Busch vs. BAWAG Group AG | Anheuser Busch vs. Semperit Aktiengesellschaft Holding | Anheuser Busch vs. Telekom Austria AG |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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