Correlation Between Anheuser Busch and CA Immobilien

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

By analyzing existing cross correlation between Anheuser Busch InBev SANV and CA Immobilien Anlagen, you can compare the effects of market volatilities on Anheuser Busch and CA Immobilien 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 CA Immobilien. Check out your portfolio center. Please also check ongoing floating volatility patterns of Anheuser Busch and CA Immobilien.

Diversification Opportunities for Anheuser Busch and CA Immobilien

0.67

Correlation Coefficient

Anheuser Busch  CA Immobilien

Poor diversification

The 3 months correlation between Anheuser and CAI is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Anheuser Busch InBev SANV and CA Immobilien Anlagen in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CA Immobilien Anlagen 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 SANV are associated (or correlated) with CA Immobilien. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CA Immobilien Anlagen has no effect on the direction of Anheuser Busch i.e., Anheuser Busch and CA Immobilien go up and down completely randomly.

Pair Corralation between Anheuser Busch and CA Immobilien

Assuming the 90 days trading horizon Anheuser Busch InBev SANV is expected to under-perform the CA Immobilien. But the stock apears to be less risky and, when comparing its historical volatility, Anheuser Busch InBev SANV is 1.97 times less risky than CA Immobilien. The stock trades about -0.16 of its potential returns per unit of risk. The CA Immobilien Anlagen is currently generating about -0.06 of returns per unit of risk over similar time horizon. If you would invest  2,702  in CA Immobilien Anlagen on September 13, 2024 and sell it today you would lose (348.00) from holding CA Immobilien Anlagen or give up 12.88% of portfolio value over 90 days.

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

Anheuser Busch InBev SANV  vs.  CA Immobilien Anlagen

Anheuser Busch InBev

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Anheuser Busch InBev SANV has generated negative risk-adjusted returns adding no value to investors with long positions. Despite inconsistent performance in the last few months, the Stock's forward indicators remain fairly strong which may send shares a bit higher in January 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

CA Immobilien Anlagen

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CA Immobilien Anlagen has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest inconsistent performance, the Stock's forward indicators remain strong and the recent confusion on Wall Street may also be a sign of long-lasting gains for the firm traders.

Pair Trading with Anheuser Busch and CA Immobilien

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

The idea behind Anheuser Busch InBev SANV and CA Immobilien Anlagen 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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.