Correlation Between WK Kellogg and Anheuser Busch

Can any of the company-specific risk be diversified away by investing in both WK Kellogg and Anheuser Busch 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 WK Kellogg and Anheuser Busch into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between WK Kellogg Co and Anheuser Busch Inbev, you can compare the effects of market volatilities on WK Kellogg and Anheuser Busch 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 WK Kellogg with a short position of Anheuser Busch. Check out your portfolio center. Please also check ongoing floating volatility patterns of WK Kellogg and Anheuser Busch.

Diversification Opportunities for WK Kellogg and Anheuser Busch

-0.42

Correlation Coefficient

WK Kellogg  Anheuser Busch

Very good diversification

The 3 months correlation between KLG and Anheuser is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding WK Kellogg Co and Anheuser Busch Inbev in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Anheuser Busch Inbev and WK Kellogg 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 WK Kellogg Co are associated (or correlated) with Anheuser Busch. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Anheuser Busch Inbev has no effect on the direction of WK Kellogg i.e., WK Kellogg and Anheuser Busch go up and down completely randomly.

Pair Corralation between WK Kellogg and Anheuser Busch

Considering the 90-day investment horizon WK Kellogg Co is expected to generate 2.11 times more return on investment than Anheuser Busch. However, WK Kellogg is 2.11 times more volatile than Anheuser Busch Inbev. It trades about 0.13 of its potential returns per unit of risk. Anheuser Busch Inbev is currently generating about -0.1 per unit of risk. If you would invest  1,719  in WK Kellogg Co on May 5, 2025 and sell it today you would earn a total of  589.00  from holding WK Kellogg Co or generate 34.26% return on investment over 90 days.

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

WK Kellogg Co  vs.  Anheuser Busch Inbev

WK Kellogg

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in WK Kellogg Co are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak essential indicators, WK Kellogg reported solid returns over the last few months and may actually be approaching a breakup point.

Anheuser Busch Inbev

Risk-Adjusted Performance

Very Weak

Over the last 90 days Anheuser Busch Inbev 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 basic indicators remain rather sound which may send shares a bit higher in September 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with WK Kellogg and Anheuser Busch

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

The idea behind WK Kellogg Co and Anheuser Busch Inbev 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.