Correlation Between Just Eat and Anheuser Busch

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

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

Diversification Opportunities for Just Eat and Anheuser Busch

0.67

Correlation Coefficient

Just Eat  Anheuser Busch

Poor diversification

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

Pair Corralation between Just Eat and Anheuser Busch

Assuming the 90 days trading horizon Just Eat Takeaway is expected to generate 5.87 times more return on investment than Anheuser Busch. However, Just Eat is 5.87 times more volatile than Anheuser Busch Inbev. It trades about 0.09 of its potential returns per unit of risk. Anheuser Busch Inbev is currently generating about 0.04 per unit of risk. If you would invest  1,478  in Just Eat Takeaway on November 28, 2024 and sell it today you would earn a total of  445.00  from holding Just Eat Takeaway or generate 30.11% return on investment over 90 days.

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

Just Eat Takeaway  vs.  Anheuser Busch Inbev

Just Eat Takeaway

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Just Eat Takeaway are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Just Eat unveiled solid returns over the last few months and may actually be approaching a breakup point.

Anheuser Busch Inbev

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Anheuser Busch Inbev are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable forward indicators, Anheuser Busch 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 Just Eat and Anheuser Busch

The main advantage of trading using opposite Just Eat and Anheuser Busch positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Just Eat 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 Just Eat Takeaway 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.