Correlation Between Anheuser Busch and Lancaster Colony
Can any of the company-specific risk be diversified away by investing in both Anheuser Busch and Lancaster Colony 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 Lancaster Colony 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 Lancaster Colony, you can compare the effects of market volatilities on Anheuser Busch and Lancaster Colony 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 Lancaster Colony. Check out your portfolio center. Please also check ongoing floating volatility patterns of Anheuser Busch and Lancaster Colony.
Diversification Opportunities for Anheuser Busch and Lancaster Colony
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Anheuser and Lancaster is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Anheuser Busch Inbev and Lancaster Colony in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lancaster Colony 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 Lancaster Colony. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lancaster Colony has no effect on the direction of Anheuser Busch i.e., Anheuser Busch and Lancaster Colony go up and down completely randomly.
Pair Corralation between Anheuser Busch and Lancaster Colony
Considering the 90-day investment horizon Anheuser Busch Inbev is expected to under-perform the Lancaster Colony. But the stock apears to be less risky and, when comparing its historical volatility, Anheuser Busch Inbev is 1.72 times less risky than Lancaster Colony. The stock trades about -0.52 of its potential returns per unit of risk. The Lancaster Colony is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 18,111 in Lancaster Colony on August 27, 2024 and sell it today you would earn a total of 527.00 from holding Lancaster Colony or generate 2.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Anheuser Busch Inbev vs. Lancaster Colony
Performance |
| Timeline |
| Anheuser Busch Inbev |
| Lancaster Colony |
Anheuser Busch and Lancaster Colony Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Anheuser Busch and Lancaster Colony
The main advantage of trading using opposite Anheuser Busch and Lancaster Colony positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Anheuser Busch position performs unexpectedly, Lancaster Colony 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 Lancaster Colony will offset losses from the drop in Lancaster Colony'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 |
| Lancaster Colony vs. Treehouse Foods | Lancaster Colony vs. John B Sanfilippo | Lancaster Colony vs. Seneca Foods Corp | Lancaster Colony vs. Seneca Foods Corp |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
Other Complementary Tools
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules |