Correlation Between Smithfield Foods, and Anheuser Busch

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

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

Diversification Opportunities for Smithfield Foods, and Anheuser Busch

0.17

Correlation Coefficient

Smithfield Foods,  Anheuser Busch

Average diversification

The 3 months correlation between Smithfield and Anheuser is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Smithfield Foods, Common 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 Smithfield Foods, 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 Smithfield Foods, Common 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 Smithfield Foods, i.e., Smithfield Foods, and Anheuser Busch go up and down completely randomly.

Pair Corralation between Smithfield Foods, and Anheuser Busch

Considering the 90-day investment horizon Smithfield Foods, Common is expected to generate 0.56 times more return on investment than Anheuser Busch. However, Smithfield Foods, Common is 1.78 times less risky than Anheuser Busch. It trades about 0.12 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  2,235  in Smithfield Foods, Common on May 5, 2025 and sell it today you would earn a total of  197.00  from holding Smithfield Foods, Common or generate 8.81% return on investment over 90 days.

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

Smithfield Foods, Common  vs.  Anheuser Busch Inbev

Smithfield Foods, Common

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Smithfield Foods, Common are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain technical and fundamental indicators, Smithfield Foods, may actually be approaching a critical reversion point that can send shares even higher in September 2025.

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 Smithfield Foods, and Anheuser Busch

The main advantage of trading using opposite Smithfield Foods, and Anheuser Busch positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Smithfield Foods, 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 Smithfield Foods, Common 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.