Correlation Between Anheuser Busch and Abcellera Biologics

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Anheuser Busch and Abcellera Biologics 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 Abcellera Biologics 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 Abcellera Biologics, you can compare the effects of market volatilities on Anheuser Busch and Abcellera Biologics 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 Abcellera Biologics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Anheuser Busch and Abcellera Biologics.

Diversification Opportunities for Anheuser Busch and Abcellera Biologics

-0.68
  Correlation Coefficient

Excellent diversification

The 3 months correlation between Anheuser and Abcellera is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding Anheuser Busch Inbev and Abcellera Biologics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Abcellera Biologics 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 Abcellera Biologics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Abcellera Biologics has no effect on the direction of Anheuser Busch i.e., Anheuser Busch and Abcellera Biologics go up and down completely randomly.

Pair Corralation between Anheuser Busch and Abcellera Biologics

Considering the 90-day investment horizon Anheuser Busch Inbev is expected to under-perform the Abcellera Biologics. But the stock apears to be less risky and, when comparing its historical volatility, Anheuser Busch Inbev is 2.98 times less risky than Abcellera Biologics. The stock trades about -0.28 of its potential returns per unit of risk. The Abcellera Biologics is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  274.00  in Abcellera Biologics on September 19, 2024 and sell it today you would lose (5.00) from holding Abcellera Biologics or give up 1.82% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

Anheuser Busch Inbev  vs.  Abcellera Biologics

 Performance 
       Timeline  
Anheuser Busch Inbev 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
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 unfluctuating performance in the last few months, the Stock's basic indicators remain rather sound which may send shares a bit higher in January 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.
Abcellera Biologics 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Weak
Over the last 90 days Abcellera Biologics has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent fundamental indicators, Abcellera Biologics is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Anheuser Busch and Abcellera Biologics Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Anheuser Busch and Abcellera Biologics

The main advantage of trading using opposite Anheuser Busch and Abcellera Biologics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Anheuser Busch position performs unexpectedly, Abcellera Biologics 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 Abcellera Biologics will offset losses from the drop in Abcellera Biologics' long position.
The idea behind Anheuser Busch Inbev and Abcellera Biologics 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.
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.

Other Complementary Tools

Idea Optimizer
Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio
CEOs Directory
Screen CEOs from public companies around the world
Performance Analysis
Check effects of mean-variance optimization against your current asset allocation
Portfolio Optimization
Compute new portfolio that will generate highest expected return given your specified tolerance for risk
Money Managers
Screen money managers from public funds and ETFs managed around the world