Correlation Between Budweiser Brewing and Barfresh Food

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

By analyzing existing cross correlation between Budweiser Brewing and Barfresh Food Group, you can compare the effects of market volatilities on Budweiser Brewing and Barfresh Food 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 Budweiser Brewing with a short position of Barfresh Food. Check out your portfolio center. Please also check ongoing floating volatility patterns of Budweiser Brewing and Barfresh Food.

Diversification Opportunities for Budweiser Brewing and Barfresh Food

-0.16

Correlation Coefficient

Budweiser Brewing  Barfresh Food

Good diversification

The 3 months correlation between Budweiser and Barfresh is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Budweiser Brewing and Barfresh Food Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Barfresh Food Group and Budweiser Brewing 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 Budweiser Brewing are associated (or correlated) with Barfresh Food. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Barfresh Food Group has no effect on the direction of Budweiser Brewing i.e., Budweiser Brewing and Barfresh Food go up and down completely randomly.

Pair Corralation between Budweiser Brewing and Barfresh Food

Assuming the 90 days horizon Budweiser Brewing is expected to generate 0.84 times more return on investment than Barfresh Food. However, Budweiser Brewing is 1.19 times less risky than Barfresh Food. It trades about 0.01 of its potential returns per unit of risk. Barfresh Food Group is currently generating about -0.01 per unit of risk. If you would invest  407.00  in Budweiser Brewing on September 12, 2024 and sell it today you would lose (8.00) from holding Budweiser Brewing or give up 1.97% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.44%
Values	Daily Returns

Budweiser Brewing  vs.  Barfresh Food Group

Budweiser Brewing

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Budweiser Brewing are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong fundamental drivers, Budweiser Brewing is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Barfresh Food Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Barfresh Food Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong technical and fundamental indicators, Barfresh Food is not utilizing all of its potentials. The current stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Budweiser Brewing and Barfresh Food

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

The idea behind Budweiser Brewing and Barfresh Food Group 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.