Correlation Between Anheuser Busch and ScanSource

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

Diversification Opportunities for Anheuser Busch and ScanSource

0.78

Correlation Coefficient

Anheuser Busch  ScanSource

Poor diversification

The 3 months correlation between Anheuser and ScanSource is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Anheuser Busch Inbev and ScanSource in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ScanSource 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 ScanSource. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ScanSource has no effect on the direction of Anheuser Busch i.e., Anheuser Busch and ScanSource go up and down completely randomly.

Pair Corralation between Anheuser Busch and ScanSource

Considering the 90-day investment horizon Anheuser Busch is expected to generate 5.14 times less return on investment than ScanSource. But when comparing it to its historical volatility, Anheuser Busch Inbev is 1.75 times less risky than ScanSource. It trades about 0.08 of its potential returns per unit of risk. ScanSource is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest  3,188  in ScanSource on April 23, 2025 and sell it today you would earn a total of  853.00  from holding ScanSource or generate 26.76% 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.  ScanSource

Anheuser Busch Inbev

Risk-Adjusted Performance

Modest

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.

ScanSource

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in ScanSource are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of rather unfluctuating basic indicators, ScanSource exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Anheuser Busch and ScanSource

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

The idea behind Anheuser Busch Inbev and ScanSource 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.