Correlation Between BOSTON BEER and Canadian Utilities
Can any of the company-specific risk be diversified away by investing in both BOSTON BEER and Canadian Utilities 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 Canadian Utilities 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 Canadian Utilities Limited, you can compare the effects of market volatilities on BOSTON BEER and Canadian Utilities 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 Canadian Utilities. Check out your portfolio center. Please also check ongoing floating volatility patterns of BOSTON BEER and Canadian Utilities.
Diversification Opportunities for BOSTON BEER and Canadian Utilities
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between BOSTON and Canadian is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding BOSTON BEER A and Canadian Utilities Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Canadian Utilities 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 Canadian Utilities. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Canadian Utilities has no effect on the direction of BOSTON BEER i.e., BOSTON BEER and Canadian Utilities go up and down completely randomly.
Pair Corralation between BOSTON BEER and Canadian Utilities
Assuming the 90 days trading horizon BOSTON BEER A is expected to under-perform the Canadian Utilities. In addition to that, BOSTON BEER is 1.69 times more volatile than Canadian Utilities Limited. It trades about -0.01 of its total potential returns per unit of risk. Canadian Utilities Limited is currently generating about 0.02 per unit of volatility. If you would invest 2,263 in Canadian Utilities Limited on September 3, 2024 and sell it today you would earn a total of 136.00 from holding Canadian Utilities Limited or generate 6.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
BOSTON BEER A vs. Canadian Utilities Limited
Performance |
| Timeline |
| BOSTON BEER A |
| Canadian Utilities |
BOSTON BEER and Canadian Utilities Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BOSTON BEER and Canadian Utilities
The main advantage of trading using opposite BOSTON BEER and Canadian Utilities positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BOSTON BEER position performs unexpectedly, Canadian Utilities 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 Canadian Utilities will offset losses from the drop in Canadian Utilities' 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 |
| Canadian Utilities vs. MAVEN WIRELESS SWEDEN | Canadian Utilities vs. Citic Telecom International | Canadian Utilities vs. Tower One Wireless | Canadian Utilities vs. Chunghwa Telecom Co |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
Other Complementary Tools
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated |