Correlation Between Anheuser Busch and Griffon
Can any of the company-specific risk be diversified away by investing in both Anheuser Busch and Griffon 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 Griffon 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 Griffon, you can compare the effects of market volatilities on Anheuser Busch and Griffon 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 Griffon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Anheuser Busch and Griffon.
Diversification Opportunities for Anheuser Busch and Griffon
-0.76 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Anheuser and Griffon is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding Anheuser Busch Inbev and Griffon in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Griffon 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 Griffon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Griffon has no effect on the direction of Anheuser Busch i.e., Anheuser Busch and Griffon go up and down completely randomly.
Pair Corralation between Anheuser Busch and Griffon
Considering the 90-day investment horizon Anheuser Busch Inbev is expected to under-perform the Griffon. But the stock apears to be less risky and, when comparing its historical volatility, Anheuser Busch Inbev is 2.39 times less risky than Griffon. The stock trades about -0.26 of its potential returns per unit of risk. The Griffon is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 6,466 in Griffon on September 12, 2024 and sell it today you would earn a total of 1,519 from holding Griffon or generate 23.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Anheuser Busch Inbev vs. Griffon
Performance |
| Timeline |
| Anheuser Busch Inbev |
| Griffon |
Anheuser Busch and Griffon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Anheuser Busch and Griffon
The main advantage of trading using opposite Anheuser Busch and Griffon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Anheuser Busch position performs unexpectedly, Griffon 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 Griffon will offset losses from the drop in Griffon's long position.| Anheuser Busch vs. Boston Beer | Anheuser Busch vs. Molson Coors Beverage | Anheuser Busch vs. Heineken NV | Anheuser Busch vs. Ambev SA ADR |
| Griffon vs. Steel Partners Holdings | Griffon vs. Brookfield Business Partners | Griffon vs. Tejon Ranch Co | Griffon vs. Compass Diversified 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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