Correlation Between BOSTON BEER and NAKED WINES
Can any of the company-specific risk be diversified away by investing in both BOSTON BEER and NAKED WINES 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 NAKED WINES 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 NAKED WINES PLC, you can compare the effects of market volatilities on BOSTON BEER and NAKED WINES 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 NAKED WINES. Check out your portfolio center. Please also check ongoing floating volatility patterns of BOSTON BEER and NAKED WINES.
Diversification Opportunities for BOSTON BEER and NAKED WINES
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between BOSTON and NAKED is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding BOSTON BEER A and NAKED WINES PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NAKED WINES PLC 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 NAKED WINES. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NAKED WINES PLC has no effect on the direction of BOSTON BEER i.e., BOSTON BEER and NAKED WINES go up and down completely randomly.
Pair Corralation between BOSTON BEER and NAKED WINES
Assuming the 90 days trading horizon BOSTON BEER A is expected to generate 0.59 times more return on investment than NAKED WINES. However, BOSTON BEER A is 1.68 times less risky than NAKED WINES. It trades about 0.27 of its potential returns per unit of risk. NAKED WINES PLC is currently generating about -0.11 per unit of risk. If you would invest 26,740 in BOSTON BEER A on September 5, 2024 and sell it today you would earn a total of 2,900 from holding BOSTON BEER A or generate 10.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
BOSTON BEER A vs. NAKED WINES PLC
Performance |
| Timeline |
| BOSTON BEER A |
| NAKED WINES PLC |
BOSTON BEER and NAKED WINES Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BOSTON BEER and NAKED WINES
The main advantage of trading using opposite BOSTON BEER and NAKED WINES positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BOSTON BEER position performs unexpectedly, NAKED WINES 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 NAKED WINES will offset losses from the drop in NAKED WINES's long position.| BOSTON BEER vs. BII Railway Transportation | BOSTON BEER vs. Fukuyama Transporting Co | BOSTON BEER vs. TEXAS ROADHOUSE | BOSTON BEER vs. Air Transport Services |
| NAKED WINES vs. CHINA TONTINE WINES | NAKED WINES vs. Superior Plus Corp | NAKED WINES vs. NMI Holdings | NAKED WINES vs. Origin Agritech |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
Other Complementary Tools
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device |