Correlation Between Anheuser Busch and Xerox Corp
Can any of the company-specific risk be diversified away by investing in both Anheuser Busch and Xerox Corp 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 Xerox Corp 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 Xerox Corp, you can compare the effects of market volatilities on Anheuser Busch and Xerox Corp 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 Xerox Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Anheuser Busch and Xerox Corp.
Diversification Opportunities for Anheuser Busch and Xerox Corp
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Anheuser and Xerox is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Anheuser Busch Inbev and Xerox Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xerox Corp 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 Xerox Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xerox Corp has no effect on the direction of Anheuser Busch i.e., Anheuser Busch and Xerox Corp go up and down completely randomly.
Pair Corralation between Anheuser Busch and Xerox Corp
Considering the 90-day investment horizon Anheuser Busch Inbev is expected to generate 0.39 times more return on investment than Xerox Corp. However, Anheuser Busch Inbev is 2.56 times less risky than Xerox Corp. It trades about -0.06 of its potential returns per unit of risk. Xerox Corp is currently generating about -0.4 per unit of risk. If you would invest 6,084 in Anheuser Busch Inbev on January 27, 2024 and sell it today you would lose (83.00) from holding Anheuser Busch Inbev or give up 1.36% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Anheuser Busch Inbev vs. Xerox Corp
Performance |
| Timeline |
| Anheuser Busch Inbev |
| Xerox Corp |
Anheuser Busch and Xerox Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Anheuser Busch and Xerox Corp
The main advantage of trading using opposite Anheuser Busch and Xerox Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Anheuser Busch position performs unexpectedly, Xerox Corp 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 Xerox Corp will offset losses from the drop in Xerox Corp's long position.| Anheuser Busch vs. Fomento Economico Mexicano | Anheuser Busch vs. Carlsberg AS | Anheuser Busch vs. Molson Coors Beverage | Anheuser Busch vs. Heineken NV |
| Xerox Corp vs. EPAM Systems | Xerox Corp vs. Infosys Ltd ADR | Xerox Corp vs. Cognizant Technology Solutions | Xerox Corp vs. FiscalNote Holdings |
Check out your portfolio center.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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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