Correlation Between Anheuser Busch and Palomar Holdings
Can any of the company-specific risk be diversified away by investing in both Anheuser Busch and Palomar Holdings 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 Palomar Holdings 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 Palomar Holdings, you can compare the effects of market volatilities on Anheuser Busch and Palomar Holdings 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 Palomar Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Anheuser Busch and Palomar Holdings.
Diversification Opportunities for Anheuser Busch and Palomar Holdings
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Anheuser and Palomar is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Anheuser Busch Inbev and Palomar Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Palomar Holdings 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 Palomar Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Palomar Holdings has no effect on the direction of Anheuser Busch i.e., Anheuser Busch and Palomar Holdings go up and down completely randomly.
Pair Corralation between Anheuser Busch and Palomar Holdings
Considering the 90-day investment horizon Anheuser Busch Inbev is expected to generate 0.72 times more return on investment than Palomar Holdings. However, Anheuser Busch Inbev is 1.39 times less risky than Palomar Holdings. It trades about -0.08 of its potential returns per unit of risk. Palomar Holdings is currently generating about -0.14 per unit of risk. If you would invest 7,053 in Anheuser Busch Inbev on May 29, 2025 and sell it today you would lose (774.00) from holding Anheuser Busch Inbev or give up 10.97% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Anheuser Busch Inbev vs. Palomar Holdings
Performance |
| Timeline |
| Anheuser Busch Inbev |
| Palomar Holdings |
Anheuser Busch and Palomar Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Anheuser Busch and Palomar Holdings
The main advantage of trading using opposite Anheuser Busch and Palomar Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Anheuser Busch position performs unexpectedly, Palomar Holdings 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 Palomar Holdings will offset losses from the drop in Palomar Holdings' long position.| Anheuser Busch vs. Heineken NV | Anheuser Busch vs. Ambev SA ADR | Anheuser Busch vs. Budweiser Brewing | Anheuser Busch vs. Anheuser Busch InBev SANV |
| Palomar Holdings vs. Selective Insurance Group | Palomar Holdings vs. ProAssurance | Palomar Holdings vs. Kemper | Palomar Holdings vs. Skyward Specialty Insurance |
Check out your portfolio center.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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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