Correlation Between Anheuser Busch and ALEFARM BREWING

Can any of the company-specific risk be diversified away by investing in both Anheuser Busch and ALEFARM BREWING 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 ALEFARM BREWING 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 ALEFARM BREWING DK 05, you can compare the effects of market volatilities on Anheuser Busch and ALEFARM BREWING 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 ALEFARM BREWING. Check out your portfolio center. Please also check ongoing floating volatility patterns of Anheuser Busch and ALEFARM BREWING.

Diversification Opportunities for Anheuser Busch and ALEFARM BREWING

-0.03

Correlation Coefficient

Anheuser Busch  ALEFARM BREWING

Good diversification

The 3 months correlation between Anheuser and ALEFARM is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Anheuser Busch InBev SANV and ALEFARM BREWING DK 05 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ALEFARM BREWING DK 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 ALEFARM BREWING. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ALEFARM BREWING DK has no effect on the direction of Anheuser Busch i.e., Anheuser Busch and ALEFARM BREWING go up and down completely randomly.

Pair Corralation between Anheuser Busch and ALEFARM BREWING

Assuming the 90 days trading horizon Anheuser Busch InBev SANV is expected to generate 0.25 times more return on investment than ALEFARM BREWING. However, Anheuser Busch InBev SANV is 3.99 times less risky than ALEFARM BREWING. It trades about 0.03 of its potential returns per unit of risk. ALEFARM BREWING DK 05 is currently generating about -0.01 per unit of risk. If you would invest  5,656  in Anheuser Busch InBev SANV on April 21, 2025 and sell it today you would earn a total of  94.00  from holding Anheuser Busch InBev SANV or generate 1.66% 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.  ALEFARM BREWING DK 05

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.

ALEFARM BREWING DK

Risk-Adjusted Performance

Very Weak

Over the last 90 days ALEFARM BREWING DK 05 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, ALEFARM BREWING is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Anheuser Busch and ALEFARM BREWING

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

The idea behind Anheuser Busch InBev SANV and ALEFARM BREWING DK 05 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.