Correlation Between Anheuser Busch and Townsquare Media

Can any of the company-specific risk be diversified away by investing in both Anheuser Busch and Townsquare Media 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 Townsquare Media into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Anheuser Busch InBev SANV and Townsquare Media, you can compare the effects of market volatilities on Anheuser Busch and Townsquare Media 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 Townsquare Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of Anheuser Busch and Townsquare Media.

Diversification Opportunities for Anheuser Busch and Townsquare Media

-0.23

Correlation Coefficient

Anheuser Busch  Townsquare Media

Very good diversification

The 3 months correlation between Anheuser and Townsquare is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Anheuser Busch InBev SANV and Townsquare Media in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Townsquare Media 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 SANV are associated (or correlated) with Townsquare Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Townsquare Media has no effect on the direction of Anheuser Busch i.e., Anheuser Busch and Townsquare Media go up and down completely randomly.

Pair Corralation between Anheuser Busch and Townsquare Media

Assuming the 90 days trading horizon Anheuser Busch is expected to generate 14.48 times less return on investment than Townsquare Media. But when comparing it to its historical volatility, Anheuser Busch InBev SANV is 1.99 times less risky than Townsquare Media. It trades about 0.03 of its potential returns per unit of risk. Townsquare Media is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest  566.00  in Townsquare Media on April 22, 2025 and sell it today you would earn a total of  184.00  from holding Townsquare Media or generate 32.51% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Anheuser Busch InBev SANV  vs.  Townsquare Media

Anheuser Busch InBev

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Anheuser Busch InBev SANV are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable forward-looking signals, Anheuser Busch is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Townsquare Media

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Townsquare Media are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, Townsquare Media reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Anheuser Busch and Townsquare Media

The main advantage of trading using opposite Anheuser Busch and Townsquare Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Anheuser Busch position performs unexpectedly, Townsquare Media 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 Townsquare Media will offset losses from the drop in Townsquare Media's long position.

The idea behind Anheuser Busch InBev SANV and Townsquare Media 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.

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 Anywhere module to track or share privately all of your investments from the convenience of any device.