Correlation Between BOSTON BEER and International Game
Can any of the company-specific risk be diversified away by investing in both BOSTON BEER and International Game 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 BOSTON BEER and International Game into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BOSTON BEER A and International Game Technology, you can compare the effects of market volatilities on BOSTON BEER and International Game 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 BOSTON BEER with a short position of International Game. Check out your portfolio center. Please also check ongoing floating volatility patterns of BOSTON BEER and International Game.
Diversification Opportunities for BOSTON BEER and International Game
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between BOSTON and International is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding BOSTON BEER A and International Game Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on International Game and BOSTON BEER 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 BOSTON BEER A are associated (or correlated) with International Game. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of International Game has no effect on the direction of BOSTON BEER i.e., BOSTON BEER and International Game go up and down completely randomly.
Pair Corralation between BOSTON BEER and International Game
Assuming the 90 days trading horizon BOSTON BEER A is expected to generate 0.94 times more return on investment than International Game. However, BOSTON BEER A is 1.06 times less risky than International Game. It trades about -0.01 of its potential returns per unit of risk. International Game Technology is currently generating about -0.04 per unit of risk. If you would invest 32,300 in BOSTON BEER A on September 3, 2024 and sell it today you would lose (2,480) from holding BOSTON BEER A or give up 7.68% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
BOSTON BEER A vs. International Game Technology
Performance |
| Timeline |
| BOSTON BEER A |
| International Game |
BOSTON BEER and International Game Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BOSTON BEER and International Game
The main advantage of trading using opposite BOSTON BEER and International Game positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BOSTON BEER position performs unexpectedly, International Game 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 International Game will offset losses from the drop in International Game's long position.| BOSTON BEER vs. China Resources Beer | BOSTON BEER vs. Tsingtao Brewery | BOSTON BEER vs. Molson Coors Beverage | BOSTON BEER vs. United Breweries Co |
| International Game vs. Aluminum of | International Game vs. HOCHSCHILD MINING | International Game vs. GigaMedia | International Game vs. QINGCI GAMES INC |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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