Correlation Between Under Armour and Anheuser Busch
Can any of the company-specific risk be diversified away by investing in both Under Armour 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 Under Armour and Anheuser Busch into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Under Armour C and Anheuser Busch Inbev, you can compare the effects of market volatilities on Under Armour 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 Under Armour with a short position of Anheuser Busch. Check out your portfolio center. Please also check ongoing floating volatility patterns of Under Armour and Anheuser Busch.
Diversification Opportunities for Under Armour and Anheuser Busch
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Under and Anheuser is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Under Armour C 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 Under Armour 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 Under Armour C 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 Under Armour i.e., Under Armour and Anheuser Busch go up and down completely randomly.
Pair Corralation between Under Armour and Anheuser Busch
Allowing for the 90-day total investment horizon Under Armour C is expected to generate 2.28 times more return on investment than Anheuser Busch. However, Under Armour is 2.28 times more volatile than Anheuser Busch Inbev. It trades about 0.04 of its potential returns per unit of risk. Anheuser Busch Inbev is currently generating about 0.0 per unit of risk. 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 |
Under Armour C vs. Anheuser Busch Inbev
Performance |
| Timeline |
| Under Armour C |
| Anheuser Busch Inbev |
Under Armour and Anheuser Busch Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Under Armour and Anheuser Busch
The main advantage of trading using opposite Under Armour and Anheuser Busch positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Under Armour 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.| Under Armour vs. Levi Strauss Co | Under Armour vs. Columbia Sportswear | Under Armour vs. Hanesbrands | Under Armour vs. PVH Corp |
| 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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