Correlation Between ASML Holding and Anheuser Busch

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

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

Diversification Opportunities for ASML Holding and Anheuser Busch

-0.67

Correlation Coefficient

ASML Holding  Anheuser Busch

Excellent diversification

The 3 months correlation between ASML and Anheuser is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding ASML Holding NV 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 ASML Holding 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 ASML Holding NV 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 ASML Holding i.e., ASML Holding and Anheuser Busch go up and down completely randomly.

Pair Corralation between ASML Holding and Anheuser Busch

Assuming the 90 days trading horizon ASML Holding NV is expected to under-perform the Anheuser Busch. In addition to that, ASML Holding is 1.52 times more volatile than Anheuser Busch Inbev. It trades about -0.03 of its total potential returns per unit of risk. Anheuser Busch Inbev is currently generating about 0.19 per unit of volatility. If you would invest  4,802  in Anheuser Busch Inbev on December 30, 2024 and sell it today you would earn a total of  970.00  from holding Anheuser Busch Inbev or generate 20.2% return on investment over 90 days.

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

ASML Holding NV  vs.  Anheuser Busch Inbev

ASML Holding NV

Risk-Adjusted Performance

Very Weak

Over the last 90 days ASML Holding NV has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, ASML Holding is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

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.

Pair Trading with ASML Holding and Anheuser Busch

The main advantage of trading using opposite ASML Holding and Anheuser Busch positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ASML Holding 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.

The idea behind ASML Holding NV and Anheuser Busch Inbev 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.