Correlation Between Anheuser-Busch Inbev and Coca Cola

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Anheuser-Busch Inbev and Coca Cola 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 Inbev and Coca Cola into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Anheuser-Busch Inbev SA and Coca-Cola, you can compare the effects of market volatilities on Anheuser-Busch Inbev and Coca Cola 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 Inbev with a short position of Coca Cola. Check out your portfolio center. Please also check ongoing floating volatility patterns of Anheuser-Busch Inbev and Coca Cola.

Diversification Opportunities for Anheuser-Busch Inbev and Coca Cola

0.56
  Correlation Coefficient

Very weak diversification

The 3 months correlation between Anheuser-Busch and Coca Cola is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Anheuser-Busch Inbev SA and Coca-Cola in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Coca-Cola and Anheuser-Busch Inbev 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 SA are associated (or correlated) with Coca Cola. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Coca-Cola has no effect on the direction of Anheuser-Busch Inbev i.e., Anheuser-Busch Inbev and Coca Cola go up and down completely randomly.

Pair Corralation between Anheuser-Busch Inbev and Coca Cola

Considering the 90-day investment horizon Anheuser-Busch Inbev SA is expected to under-perform the Coca Cola. In addition to that, Anheuser-Busch Inbev is 1.55 times more volatile than Coca-Cola. It trades about -0.08 of its total potential returns per unit of risk. Coca-Cola is currently generating about 0.0 per unit of volatility. If you would invest  5,951  in Coca-Cola on June 27, 2022 and sell it today you would lose (91.00)  from holding Coca-Cola or give up 1.53% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

Anheuser-Busch Inbev SA  vs.  Coca-Cola

 Performance (%) 
       Timeline  
Anheuser-Busch Inbev 
Anheuser-Busch Performance
0 of 100
Over the last 90 days Anheuser-Busch Inbev SA has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of sluggish performance in the last few months, the Stock's basic indicators remain rather sound which may send shares a bit higher in October 2022. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Anheuser-Busch Price Channel

Coca-Cola 
Coca Cola Performance
0 of 100
Over the last 90 days Coca-Cola has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent basic indicators, Coca Cola is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

Coca Cola Price Channel

Anheuser-Busch Inbev and Coca Cola Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Anheuser-Busch Inbev and Coca Cola

The main advantage of trading using opposite Anheuser-Busch Inbev and Coca Cola positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Anheuser-Busch Inbev position performs unexpectedly, Coca Cola 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 Coca Cola will offset losses from the drop in Coca Cola's long position.
Anheuser-Busch Inbev vs. Sigma Lithium Corp
The idea behind Anheuser-Busch Inbev SA and Coca-Cola 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.
Coca Cola vs. Industrias Bachoco SA
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 Stock Screener module to find equities using custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..

Other Complementary Tools

Insider Screener
Find insiders across different sectors to evaluate their impact on performance
Go
Portfolio Center
All portfolio management and optimization tools to improve performance of your portfolios
Go
ETF Directory
Find actively traded Exchange Traded Funds (ETF) from around the world
Go
Instant Ratings
Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance
Go
Pattern Recognition
Use different Pattern Recognition models to time the market across multiple global exchanges
Go
Watchlist Optimization
Optimize watchlists to build efficient portfolio or rebalance existing positions based on mean-variance optimization algorithm
Go
Options Analysis
Analyze and evaluate options and option chains as a potential hedge for your portfolios
Go
Alpha Finder
Use alpha and beta coefficients to find investment opportunities after accounting for the risk
Go
Equity Valuation
Check real value of public entities based on technical and fundamental data
Go