Correlation Between Anheuser Busch and Nyrstar NV

Can any of the company-specific risk be diversified away by investing in both Anheuser Busch and Nyrstar NV 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 Nyrstar NV 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 Nyrstar NV, you can compare the effects of market volatilities on Anheuser Busch and Nyrstar NV 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 Nyrstar NV. Check out your portfolio center. Please also check ongoing floating volatility patterns of Anheuser Busch and Nyrstar NV.

Diversification Opportunities for Anheuser Busch and Nyrstar NV

-0.48

Correlation Coefficient

Anheuser Busch  Nyrstar NV

Very good diversification

The 3 months correlation between Anheuser and Nyrstar is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Anheuser Busch Inbev and Nyrstar NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nyrstar NV 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 Nyrstar NV. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nyrstar NV has no effect on the direction of Anheuser Busch i.e., Anheuser Busch and Nyrstar NV go up and down completely randomly.

Pair Corralation between Anheuser Busch and Nyrstar NV

Assuming the 90 days trading horizon Anheuser Busch Inbev is expected to under-perform the Nyrstar NV. But the stock apears to be less risky and, when comparing its historical volatility, Anheuser Busch Inbev is 7.36 times less risky than Nyrstar NV. The stock trades about -0.14 of its potential returns per unit of risk. The Nyrstar NV is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest  4.00  in Nyrstar NV on September 15, 2024 and sell it today you would earn a total of  2.98  from holding Nyrstar NV or generate 74.5% return on investment over 90 days.

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

Anheuser Busch Inbev  vs.  Nyrstar NV

Anheuser Busch Inbev

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Anheuser Busch Inbev has generated negative risk-adjusted returns adding no value to investors with long positions. Even with latest weak performance, the Stock's forward indicators remain invariable and the latest agitation on Wall Street may also be a sign of long-running gains for the enterprise retail investors.

Nyrstar NV

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Nyrstar NV are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Nyrstar NV reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Anheuser Busch and Nyrstar NV

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

The idea behind Anheuser Busch Inbev and Nyrstar NV 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.