Correlation Between Anheuser Busch and Banimmo SA

Can any of the company-specific risk be diversified away by investing in both Anheuser Busch and Banimmo SA 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 Anheuser Busch and Banimmo SA into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Anheuser Busch Inbev and Banimmo SA, you can compare the effects of market volatilities on Anheuser Busch and Banimmo SA 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 Anheuser Busch with a short position of Banimmo SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Anheuser Busch and Banimmo SA.

Diversification Opportunities for Anheuser Busch and Banimmo SA

-0.04

Correlation Coefficient

Anheuser Busch  Banimmo SA

Good diversification

The 3 months correlation between Anheuser and Banimmo is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Anheuser Busch Inbev and Banimmo SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Banimmo SA and Anheuser Busch 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 Anheuser Busch Inbev are associated (or correlated) with Banimmo SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Banimmo SA has no effect on the direction of Anheuser Busch i.e., Anheuser Busch and Banimmo SA go up and down completely randomly.

Pair Corralation between Anheuser Busch and Banimmo SA

Assuming the 90 days trading horizon Anheuser Busch Inbev is expected to generate 1.58 times more return on investment than Banimmo SA. However, Anheuser Busch is 1.58 times more volatile than Banimmo SA. It trades about 0.19 of its potential returns per unit of risk. Banimmo SA is currently generating about 0.04 per unit of risk. If you would invest  4,842  in Anheuser Busch Inbev on December 24, 2024 and sell it today you would earn a total of  972.00  from holding Anheuser Busch Inbev or generate 20.07% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Anheuser Busch Inbev  vs.  Banimmo SA

Anheuser Busch Inbev

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Anheuser Busch Inbev are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak forward indicators, Anheuser Busch reported solid returns over the last few months and may actually be approaching a breakup point.

Banimmo SA

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Banimmo SA are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable basic indicators, Banimmo SA is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Anheuser Busch and Banimmo SA

The main advantage of trading using opposite Anheuser Busch and Banimmo SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Anheuser Busch position performs unexpectedly, Banimmo SA 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 Banimmo SA will offset losses from the drop in Banimmo SA's long position.

The idea behind Anheuser Busch Inbev and Banimmo SA pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.