Correlation Between Anheuser Busch and Mativ Holdings

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

Diversification Opportunities for Anheuser Busch and Mativ Holdings

0.64

Correlation Coefficient

Anheuser Busch  Mativ Holdings

Poor diversification

The 3 months correlation between Anheuser and Mativ is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Anheuser Busch Inbev and Mativ Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mativ Holdings 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 Mativ Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mativ Holdings has no effect on the direction of Anheuser Busch i.e., Anheuser Busch and Mativ Holdings go up and down completely randomly.

Pair Corralation between Anheuser Busch and Mativ Holdings

Considering the 90-day investment horizon Anheuser Busch is expected to generate 10.1 times less return on investment than Mativ Holdings. But when comparing it to its historical volatility, Anheuser Busch Inbev is 3.38 times less risky than Mativ Holdings. It trades about 0.08 of its potential returns per unit of risk. Mativ Holdings is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest  452.00  in Mativ Holdings on April 17, 2025 and sell it today you would earn a total of  273.00  from holding Mativ Holdings or generate 60.4% return on investment over 90 days.

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

Anheuser Busch Inbev  vs.  Mativ Holdings

Anheuser Busch Inbev

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Anheuser Busch Inbev are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound basic indicators, Anheuser Busch is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

Mativ Holdings

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Mativ Holdings are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unsteady basic indicators, Mativ Holdings showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Anheuser Busch and Mativ Holdings

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

The idea behind Anheuser Busch Inbev and Mativ Holdings 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 Stocks Directory module to find actively traded stocks across global markets.