Correlation Between Anheuser Busch and Under Armour
Can any of the company-specific risk be diversified away by investing in both Anheuser Busch and Under Armour 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 Under Armour 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 Under Armour C, you can compare the effects of market volatilities on Anheuser Busch and Under Armour 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 Under Armour. Check out your portfolio center. Please also check ongoing floating volatility patterns of Anheuser Busch and Under Armour.
Diversification Opportunities for Anheuser Busch and Under Armour
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Anheuser and Under is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Anheuser Busch Inbev and Under Armour C in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Under Armour C 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 Under Armour. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Under Armour C has no effect on the direction of Anheuser Busch i.e., Anheuser Busch and Under Armour go up and down completely randomly.
Pair Corralation between Anheuser Busch and Under Armour
Considering the 90-day investment horizon Anheuser Busch is expected to generate 18.1 times less return on investment than Under Armour. But when comparing it to its historical volatility, Anheuser Busch Inbev is 2.28 times less risky than Under Armour. It trades about 0.0 of its potential returns per unit of risk. Under Armour C is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 691.00 in Under Armour C on August 31, 2024 and sell it today you would earn a total of 186.00 from holding Under Armour C or generate 26.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.73% |
| Values | Daily Returns |
Anheuser Busch Inbev vs. Under Armour C
Performance |
| Timeline |
| Anheuser Busch Inbev |
| Under Armour C |
Anheuser Busch and Under Armour Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Anheuser Busch and Under Armour
The main advantage of trading using opposite Anheuser Busch and Under Armour positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Anheuser Busch position performs unexpectedly, Under Armour 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 Under Armour will offset losses from the drop in Under Armour'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 |
| Under Armour vs. Levi Strauss Co | Under Armour vs. Columbia Sportswear | Under Armour vs. Hanesbrands | Under Armour vs. PVH 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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