Correlation Between Anheuser Busch and CBAAU

Can any of the company-specific risk be diversified away by investing in both Anheuser Busch and CBAAU 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 CBAAU 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 CBAAU 1125 15 JUN 26, you can compare the effects of market volatilities on Anheuser Busch and CBAAU 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 CBAAU. Check out your portfolio center. Please also check ongoing floating volatility patterns of Anheuser Busch and CBAAU.

Diversification Opportunities for Anheuser Busch and CBAAU

-0.1

Correlation Coefficient

Anheuser Busch  CBAAU

Good diversification

The 3 months correlation between Anheuser and CBAAU is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Anheuser Busch Inbev and CBAAU 1125 15 JUN 26 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CBAAU 1125 15 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 CBAAU. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CBAAU 1125 15 has no effect on the direction of Anheuser Busch i.e., Anheuser Busch and CBAAU go up and down completely randomly.

Pair Corralation between Anheuser Busch and CBAAU

Considering the 90-day investment horizon Anheuser Busch Inbev is expected to under-perform the CBAAU. In addition to that, Anheuser Busch is 1.97 times more volatile than CBAAU 1125 15 JUN 26. It trades about -0.23 of its total potential returns per unit of risk. CBAAU 1125 15 JUN 26 is currently generating about -0.17 per unit of volatility. If you would invest  9,531  in CBAAU 1125 15 JUN 26 on September 13, 2024 and sell it today you would lose (349.00) from holding CBAAU 1125 15 JUN 26 or give up 3.66% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	53.13%
Values	Daily Returns

Anheuser Busch Inbev  vs.  CBAAU 1125 15 JUN 26

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. 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.

CBAAU 1125 15

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CBAAU 1125 15 JUN 26 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest uncertain performance, the Bond's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for CBAAU 1125 15 JUN 26 investors.

Pair Trading with Anheuser Busch and CBAAU

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

The idea behind Anheuser Busch Inbev and CBAAU 1125 15 JUN 26 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.