Correlation Between American Public and BOSTON BEER
Can any of the company-specific risk be diversified away by investing in both American Public and BOSTON BEER 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 American Public and BOSTON BEER into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Public Education and BOSTON BEER A , you can compare the effects of market volatilities on American Public and BOSTON BEER 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 American Public with a short position of BOSTON BEER. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Public and BOSTON BEER.
Diversification Opportunities for American Public and BOSTON BEER
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between American and BOSTON is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding American Public Education and BOSTON BEER A in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BOSTON BEER A and American Public 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 American Public Education are associated (or correlated) with BOSTON BEER. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BOSTON BEER A has no effect on the direction of American Public i.e., American Public and BOSTON BEER go up and down completely randomly.
Pair Corralation between American Public and BOSTON BEER
Assuming the 90 days horizon American Public Education is expected to generate 1.29 times more return on investment than BOSTON BEER. However, American Public is 1.29 times more volatile than BOSTON BEER A . It trades about 0.09 of its potential returns per unit of risk. BOSTON BEER A is currently generating about -0.45 per unit of risk. If you would invest 2,040 in American Public Education on November 2, 2024 and sell it today you would earn a total of 80.00 from holding American Public Education or generate 3.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
American Public Education vs. BOSTON BEER A
Performance |
| Timeline |
| American Public Education |
| BOSTON BEER A |
American Public and BOSTON BEER Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Public and BOSTON BEER
The main advantage of trading using opposite American Public and BOSTON BEER positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Public position performs unexpectedly, BOSTON BEER 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 BOSTON BEER will offset losses from the drop in BOSTON BEER's long position.| American Public vs. Verizon Communications | American Public vs. MOUNT GIBSON IRON | American Public vs. Iridium Communications | American Public vs. ecotel communication ag |
| BOSTON BEER vs. MidCap Financial Investment | BOSTON BEER vs. INTERCONT HOTELS | BOSTON BEER vs. NH HOTEL GROUP | BOSTON BEER vs. Playa Hotels Resorts |
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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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