Correlation Between Anheuser Busch and Compania Cervecerias

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

Diversification Opportunities for Anheuser Busch and Compania Cervecerias

-0.65

Correlation Coefficient

Anheuser Busch  Compania Cervecerias

Excellent diversification

The 3 months correlation between Anheuser and Compania is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Anheuser Busch Inbev and Compania Cervecerias Unidas in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Compania Cervecerias 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 Compania Cervecerias. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Compania Cervecerias has no effect on the direction of Anheuser Busch i.e., Anheuser Busch and Compania Cervecerias go up and down completely randomly.

Pair Corralation between Anheuser Busch and Compania Cervecerias

Considering the 90-day investment horizon Anheuser Busch Inbev is expected to generate 0.7 times more return on investment than Compania Cervecerias. However, Anheuser Busch Inbev is 1.43 times less risky than Compania Cervecerias. It trades about 0.15 of its potential returns per unit of risk. Compania Cervecerias Unidas is currently generating about -0.11 per unit of risk. If you would invest  6,058  in Anheuser Busch Inbev on March 30, 2025 and sell it today you would earn a total of  792.00  from holding Anheuser Busch Inbev or generate 13.07% return on investment over 90 days.

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

Anheuser Busch Inbev  vs.  Compania Cervecerias Unidas

Anheuser Busch Inbev

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Anheuser Busch Inbev are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of rather unfluctuating basic indicators, Anheuser Busch exhibited solid returns over the last few months and may actually be approaching a breakup point.

Compania Cervecerias

Risk-Adjusted Performance

Very Weak

Over the last 90 days Compania Cervecerias Unidas has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's fundamental indicators remain comparatively stable which may send shares a bit higher in July 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Anheuser Busch and Compania Cervecerias

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

The idea behind Anheuser Busch Inbev and Compania Cervecerias Unidas 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.