Correlation Between Anheuser Busch and Ingen Technologies

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

Diversification Opportunities for Anheuser Busch and Ingen Technologies

0.0

Correlation Coefficient

Anheuser Busch  Ingen Technologies

Pay attention - limited upside

The 3 months correlation between Anheuser and Ingen is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Anheuser Busch Inbev and Ingen Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ingen Technologies 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 Ingen Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ingen Technologies has no effect on the direction of Anheuser Busch i.e., Anheuser Busch and Ingen Technologies go up and down completely randomly.

Pair Corralation between Anheuser Busch and Ingen Technologies

If you would invest  5,978  in Anheuser Busch Inbev on January 25, 2024 and sell it today you would earn a total of  42.00  from holding Anheuser Busch Inbev or generate 0.7% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	90.91%
Values	Daily Returns

Anheuser Busch Inbev  vs.  Ingen Technologies

Anheuser Busch Inbev

Risk-Adjusted Performance

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Very Weak

Over the last 90 days Anheuser Busch Inbev has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, Anheuser Busch is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Ingen Technologies

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Anheuser Busch and Ingen Technologies

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

The idea behind Anheuser Busch Inbev and Ingen Technologies 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.