Correlation Between Agiliti and Anheuser Busch

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

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

Diversification Opportunities for Agiliti and Anheuser Busch

-0.64

Correlation Coefficient

Agiliti  Anheuser Busch

Excellent diversification

The 3 months correlation between Agiliti and Anheuser is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Agiliti 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 Agiliti 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 Agiliti 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 Agiliti i.e., Agiliti and Anheuser Busch go up and down completely randomly.

Pair Corralation between Agiliti and Anheuser Busch

Given the investment horizon of 90 days Agiliti is expected to generate 806.83 times less return on investment than Anheuser Busch. But when comparing it to its historical volatility, Agiliti is 3.26 times less risky than Anheuser Busch. It trades about 0.0 of its potential returns per unit of risk. Anheuser Busch Inbev is currently generating about 0.41 of returns per unit of risk over similar time horizon. If you would invest  5,782  in Anheuser Busch Inbev on February 12, 2024 and sell it today you would earn a total of  639.00  from holding Anheuser Busch Inbev or generate 11.05% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	81.82%
Values	Daily Returns

Agiliti  vs.  Anheuser Busch Inbev

Agiliti

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Agiliti are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent basic indicators, Agiliti demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Anheuser Busch Inbev

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Anheuser Busch Inbev are ranked lower than 1 (%) 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 current stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Agiliti and Anheuser Busch

The main advantage of trading using opposite Agiliti and Anheuser Busch positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Agiliti 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 Agiliti 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.