Correlation Between Anheuser Busch and Altria
Can any of the company-specific risk be diversified away by investing in both Anheuser Busch and Altria 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 Altria 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 Altria Group, you can compare the effects of market volatilities on Anheuser Busch and Altria 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 Altria. Check out your portfolio center. Please also check ongoing floating volatility patterns of Anheuser Busch and Altria.
Diversification Opportunities for Anheuser Busch and Altria
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Anheuser and Altria is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Anheuser Busch Inbev and Altria Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Altria Group 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 Altria. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Altria Group has no effect on the direction of Anheuser Busch i.e., Anheuser Busch and Altria go up and down completely randomly.
Pair Corralation between Anheuser Busch and Altria
Considering the 90-day investment horizon Anheuser Busch Inbev is expected to under-perform the Altria. In addition to that, Anheuser Busch is 1.3 times more volatile than Altria Group. It trades about -0.14 of its total potential returns per unit of risk. Altria Group is currently generating about -0.14 per unit of volatility. If you would invest 5,581 in Altria Group on November 3, 2024 and sell it today you would lose (358.00) from holding Altria Group or give up 6.41% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Anheuser Busch Inbev vs. Altria Group
Performance |
| Timeline |
| Anheuser Busch Inbev |
| Altria Group |
Anheuser Busch and Altria Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Anheuser Busch and Altria
The main advantage of trading using opposite Anheuser Busch and Altria positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Anheuser Busch position performs unexpectedly, Altria 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 Altria will offset losses from the drop in Altria'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 |
| Altria vs. British American Tobacco | Altria vs. Universal | Altria vs. Imperial Brands PLC | Altria vs. Philip Morris International |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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