Correlation Between SIKA AG and Anheuser Busch
Can any of the company-specific risk be diversified away by investing in both SIKA AG 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 SIKA AG and Anheuser Busch into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SIKA AG UNSPADR and Anheuser Busch InBev SANV, you can compare the effects of market volatilities on SIKA AG 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 SIKA AG with a short position of Anheuser Busch. Check out your portfolio center. Please also check ongoing floating volatility patterns of SIKA AG and Anheuser Busch.
Diversification Opportunities for SIKA AG and Anheuser Busch
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between SIKA and Anheuser is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding SIKA AG UNSPADR 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 SIKA AG 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 SIKA AG UNSPADR 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 SIKA AG i.e., SIKA AG and Anheuser Busch go up and down completely randomly.
Pair Corralation between SIKA AG and Anheuser Busch
Assuming the 90 days trading horizon SIKA AG UNSPADR is expected to generate 1.25 times more return on investment than Anheuser Busch. However, SIKA AG is 1.25 times more volatile than Anheuser Busch InBev SANV. It trades about -0.17 of its potential returns per unit of risk. Anheuser Busch InBev SANV is currently generating about -0.31 per unit of risk. If you would invest 2,520 in SIKA AG UNSPADR on September 2, 2024 and sell it today you would lose (140.00) from holding SIKA AG UNSPADR or give up 5.56% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SIKA AG UNSPADR vs. Anheuser Busch InBev SANV
Performance |
| Timeline |
| SIKA AG UNSPADR |
| Anheuser Busch InBev |
SIKA AG and Anheuser Busch Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SIKA AG and Anheuser Busch
The main advantage of trading using opposite SIKA AG and Anheuser Busch positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SIKA AG 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.| SIKA AG vs. GREENX METALS LTD | SIKA AG vs. AM EAGLE OUTFITTERS | SIKA AG vs. Richardson Electronics | SIKA AG vs. Arrow Electronics |
| Anheuser Busch vs. CyberArk Software | Anheuser Busch vs. MAGIC SOFTWARE ENTR | Anheuser Busch vs. SBI Insurance Group | Anheuser Busch vs. MINCO SILVER |
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 Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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