Correlation Between BOSTON BEER and Lendlease
Can any of the company-specific risk be diversified away by investing in both BOSTON BEER and Lendlease 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 Lendlease 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 Lendlease Group, you can compare the effects of market volatilities on BOSTON BEER and Lendlease 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 Lendlease. Check out your portfolio center. Please also check ongoing floating volatility patterns of BOSTON BEER and Lendlease.
Diversification Opportunities for BOSTON BEER and Lendlease
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between BOSTON and Lendlease is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding BOSTON BEER A and Lendlease Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lendlease Group 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 Lendlease. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lendlease Group has no effect on the direction of BOSTON BEER i.e., BOSTON BEER and Lendlease go up and down completely randomly.
Pair Corralation between BOSTON BEER and Lendlease
Assuming the 90 days trading horizon BOSTON BEER A is expected to under-perform the Lendlease. In addition to that, BOSTON BEER is 1.03 times more volatile than Lendlease Group. It trades about -0.05 of its total potential returns per unit of risk. Lendlease Group is currently generating about -0.01 per unit of volatility. If you would invest 422.00 in Lendlease Group on November 3, 2024 and sell it today you would lose (36.00) from holding Lendlease Group or give up 8.53% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.6% |
| Values | Daily Returns |
BOSTON BEER A vs. Lendlease Group
Performance |
| Timeline |
| BOSTON BEER A |
| Lendlease Group |
BOSTON BEER and Lendlease Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BOSTON BEER and Lendlease
The main advantage of trading using opposite BOSTON BEER and Lendlease positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BOSTON BEER position performs unexpectedly, Lendlease 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 Lendlease will offset losses from the drop in Lendlease's long position.| BOSTON BEER vs. MCEWEN MINING INC | BOSTON BEER vs. Guidewire Software | BOSTON BEER vs. Magic Software Enterprises | BOSTON BEER vs. Easy Software AG |
| Lendlease vs. Monster Beverage Corp | Lendlease vs. Tsingtao Brewery | Lendlease vs. National Beverage Corp | Lendlease vs. EVS Broadcast Equipment |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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