Correlation Between Anheuser Busch and Ageas SANV

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

Diversification Opportunities for Anheuser Busch and Ageas SANV

0.54

Correlation Coefficient

Anheuser Busch  Ageas SANV

Very weak diversification

The 3 months correlation between Anheuser and Ageas is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Anheuser Busch Inbev and ageas SANV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ageas SANV 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 Ageas SANV. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ageas SANV has no effect on the direction of Anheuser Busch i.e., Anheuser Busch and Ageas SANV go up and down completely randomly.

Pair Corralation between Anheuser Busch and Ageas SANV

Assuming the 90 days trading horizon Anheuser Busch is expected to generate 1.56 times less return on investment than Ageas SANV. But when comparing it to its historical volatility, Anheuser Busch Inbev is 1.1 times less risky than Ageas SANV. It trades about 0.04 of its potential returns per unit of risk. ageas SANV is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  3,261  in ageas SANV on June 23, 2024 and sell it today you would earn a total of  1,437  from holding ageas SANV or generate 44.07% return on investment over 90 days.

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

Anheuser Busch Inbev  vs.  ageas SANV

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 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.

ageas SANV

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in ageas SANV are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Ageas SANV may actually be approaching a critical reversion point that can send shares even higher in October 2024.

Pair Trading with Anheuser Busch and Ageas SANV

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

The idea behind Anheuser Busch Inbev and ageas SANV 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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.