Correlation Between Kraft Heinz and Anheuser Busch
Can any of the company-specific risk be diversified away by investing in both Kraft Heinz and Anheuser Busch 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 Kraft Heinz and Anheuser Busch into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kraft Heinz Co and Anheuser Busch Inbev, you can compare the effects of market volatilities on Kraft Heinz and Anheuser Busch 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 Kraft Heinz with a short position of Anheuser Busch. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kraft Heinz and Anheuser Busch.
Diversification Opportunities for Kraft Heinz and Anheuser Busch
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Kraft and Anheuser is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Kraft Heinz Co and Anheuser Busch Inbev in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Anheuser Busch Inbev and Kraft Heinz 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 Kraft Heinz Co are associated (or correlated) with Anheuser Busch. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Anheuser Busch Inbev has no effect on the direction of Kraft Heinz i.e., Kraft Heinz and Anheuser Busch go up and down completely randomly.
Pair Corralation between Kraft Heinz and Anheuser Busch
Considering the 90-day investment horizon Kraft Heinz Co is expected to generate 0.9 times more return on investment than Anheuser Busch. However, Kraft Heinz Co is 1.11 times less risky than Anheuser Busch. It trades about -0.06 of its potential returns per unit of risk. Anheuser Busch Inbev is currently generating about -0.08 per unit of risk. If you would invest 3,425 in Kraft Heinz Co on August 24, 2024 and sell it today you would lose (316.00) from holding Kraft Heinz Co or give up 9.23% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kraft Heinz Co vs. Anheuser Busch Inbev
Performance |
| Timeline |
| Kraft Heinz |
| Anheuser Busch Inbev |
Kraft Heinz and Anheuser Busch Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kraft Heinz and Anheuser Busch
The main advantage of trading using opposite Kraft Heinz and Anheuser Busch positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kraft Heinz position performs unexpectedly, Anheuser Busch 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 Anheuser Busch will offset losses from the drop in Anheuser Busch's long position.| Kraft Heinz vs. General Mills | Kraft Heinz vs. Campbell Soup | Kraft Heinz vs. ConAgra Foods | Kraft Heinz vs. Hormel Foods |
| Anheuser Busch vs. Boston Beer | Anheuser Busch vs. Molson Coors Beverage | Anheuser Busch vs. Heineken NV | Anheuser Busch vs. Ambev SA ADR |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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