Correlation Between Repligen and Anheuser Busch
Can any of the company-specific risk be diversified away by investing in both Repligen 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 Repligen and Anheuser Busch into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Repligen and Anheuser Busch Inbev, you can compare the effects of market volatilities on Repligen 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 Repligen with a short position of Anheuser Busch. Check out your portfolio center. Please also check ongoing floating volatility patterns of Repligen and Anheuser Busch.
Diversification Opportunities for Repligen and Anheuser Busch
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between Repligen and Anheuser is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Repligen 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 Repligen 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 Repligen 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 Repligen i.e., Repligen and Anheuser Busch go up and down completely randomly.
Pair Corralation between Repligen and Anheuser Busch
Given the investment horizon of 90 days Repligen is expected to generate 2.38 times more return on investment than Anheuser Busch. However, Repligen is 2.38 times more volatile than Anheuser Busch Inbev. It trades about 0.0 of its potential returns per unit of risk. Anheuser Busch Inbev is currently generating about 0.0 per unit of risk. If you would invest 16,913 in Repligen on August 27, 2024 and sell it today you would lose (2,655) from holding Repligen or give up 15.7% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Repligen vs. Anheuser Busch Inbev
Performance |
| Timeline |
| Repligen |
| Anheuser Busch Inbev |
Repligen and Anheuser Busch Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Repligen and Anheuser Busch
The main advantage of trading using opposite Repligen and Anheuser Busch positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Repligen 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.| Repligen vs. Intuitive Surgical | Repligen vs. ResMed Inc | Repligen vs. Merit Medical Systems | Repligen vs. ICU Medical |
| Anheuser Busch vs. Boston Beer | Anheuser Busch vs. Molson Coors Beverage | Anheuser Busch vs. Heineken NV | Anheuser Busch vs. Ambev SA ADR |
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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