Correlation Between Anheuser Busch and Thai Union

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Can any of the company-specific risk be diversified away by investing in both Anheuser Busch and Thai Union 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 Thai Union 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 Thai Union Group, you can compare the effects of market volatilities on Anheuser Busch and Thai Union 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 Thai Union. Check out your portfolio center. Please also check ongoing floating volatility patterns of Anheuser Busch and Thai Union.

Diversification Opportunities for Anheuser Busch and Thai Union

0.4
  Correlation Coefficient

Very weak diversification

The 3 months correlation between Anheuser and Thai is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Anheuser Busch Inbev and Thai Union Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thai Union 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 Thai Union. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thai Union Group has no effect on the direction of Anheuser Busch i.e., Anheuser Busch and Thai Union go up and down completely randomly.

Pair Corralation between Anheuser Busch and Thai Union

Considering the 90-day investment horizon Anheuser Busch Inbev is expected to generate 1.0 times more return on investment than Thai Union. However, Anheuser Busch is 1.0 times more volatile than Thai Union Group. It trades about 0.05 of its potential returns per unit of risk. Thai Union Group is currently generating about 0.04 per unit of risk. If you would invest  5,418  in Anheuser Busch Inbev on December 30, 2023 and sell it today you would earn a total of  660.00  from holding Anheuser Busch Inbev or generate 12.18% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy98.54%
ValuesDaily Returns

Anheuser Busch Inbev  vs.  Thai Union Group

 Performance 
       Timeline  
Anheuser Busch Inbev 

Risk-Adjusted Performance

0 of 100

 
Low
 
High
Very Weak
Over the last 90 days Anheuser Busch Inbev has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, Anheuser Busch is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.
Thai Union Group 

Risk-Adjusted Performance

0 of 100

 
Low
 
High
Very Weak
Over the last 90 days Thai Union Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent fundamental drivers, Thai Union is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

Anheuser Busch and Thai Union Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Anheuser Busch and Thai Union

The main advantage of trading using opposite Anheuser Busch and Thai Union positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Anheuser Busch position performs unexpectedly, Thai Union 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 Thai Union will offset losses from the drop in Thai Union's long position.
The idea behind Anheuser Busch Inbev and Thai Union Group pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.

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