Correlation Between Unilever PLC and Anheuser Busch
Can any of the company-specific risk be diversified away by investing in both Unilever PLC 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 Unilever PLC and Anheuser Busch into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Unilever PLC and Anheuser Busch InBev SANV, you can compare the effects of market volatilities on Unilever PLC 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 Unilever PLC with a short position of Anheuser Busch. Check out your portfolio center. Please also check ongoing floating volatility patterns of Unilever PLC and Anheuser Busch.
Diversification Opportunities for Unilever PLC and Anheuser Busch
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Unilever and Anheuser is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Unilever PLC 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 Unilever PLC 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 Unilever PLC 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 Unilever PLC i.e., Unilever PLC and Anheuser Busch go up and down completely randomly.
Pair Corralation between Unilever PLC and Anheuser Busch
Assuming the 90 days trading horizon Unilever PLC is expected to under-perform the Anheuser Busch. In addition to that, Unilever PLC is 1.18 times more volatile than Anheuser Busch InBev SANV. It trades about -0.07 of its total potential returns per unit of risk. Anheuser Busch InBev SANV is currently generating about 0.32 per unit of volatility. If you would invest 4,661 in Anheuser Busch InBev SANV on November 18, 2024 and sell it today you would earn a total of 425.00 from holding Anheuser Busch InBev SANV or generate 9.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Unilever PLC vs. Anheuser Busch InBev SANV
Performance |
| Timeline |
| Unilever PLC |
| Anheuser Busch InBev |
Unilever PLC and Anheuser Busch Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Unilever PLC and Anheuser Busch
The main advantage of trading using opposite Unilever PLC and Anheuser Busch positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Unilever PLC 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.| Unilever PLC vs. UNIQA Insurance Group | Unilever PLC vs. Raiffeisen Bank International | Unilever PLC vs. CNH Industrial NV | Unilever PLC vs. Universal Music Group |
| Anheuser Busch vs. Vienna Insurance Group | Anheuser Busch vs. AMAG Austria Metall | Anheuser Busch vs. Wiener Privatbank SE | Anheuser Busch vs. UNIQA Insurance Group |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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