Correlation Between Sofina Socit and Anheuser Busch
Can any of the company-specific risk be diversified away by investing in both Sofina Socit 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 Sofina Socit and Anheuser Busch into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sofina Socit Anonyme and Anheuser Busch Inbev, you can compare the effects of market volatilities on Sofina Socit 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 Sofina Socit with a short position of Anheuser Busch. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sofina Socit and Anheuser Busch.
Diversification Opportunities for Sofina Socit and Anheuser Busch
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Sofina and Anheuser is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Sofina Socit Anonyme 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 Sofina Socit 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 Sofina Socit Anonyme 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 Sofina Socit i.e., Sofina Socit and Anheuser Busch go up and down completely randomly.
Pair Corralation between Sofina Socit and Anheuser Busch
Assuming the 90 days trading horizon Sofina Socit Anonyme is expected to generate 0.73 times more return on investment than Anheuser Busch. However, Sofina Socit Anonyme is 1.38 times less risky than Anheuser Busch. It trades about -0.1 of its potential returns per unit of risk. Anheuser Busch Inbev is currently generating about -0.35 per unit of risk. If you would invest 23,160 in Sofina Socit Anonyme on August 28, 2024 and sell it today you would lose (640.00) from holding Sofina Socit Anonyme or give up 2.76% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sofina Socit Anonyme vs. Anheuser Busch Inbev
Performance |
| Timeline |
| Sofina Socit Anonyme |
| Anheuser Busch Inbev |
Sofina Socit and Anheuser Busch Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sofina Socit and Anheuser Busch
The main advantage of trading using opposite Sofina Socit and Anheuser Busch positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sofina Socit 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.| Sofina Socit vs. Retail Estates | Sofina Socit vs. Home Invest Belgium | Sofina Socit vs. Shurgard Self Storage | Sofina Socit vs. Vastned Retail Belgium |
| Anheuser Busch vs. ageas SANV | Anheuser Busch vs. Solvay SA | Anheuser Busch vs. KBC Groep NV | Anheuser Busch vs. Umicore SA |
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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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