Correlation Between BOSTON BEER and Oriola Oyj
Can any of the company-specific risk be diversified away by investing in both BOSTON BEER and Oriola Oyj 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 Oriola Oyj 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 Oriola Oyj, you can compare the effects of market volatilities on BOSTON BEER and Oriola Oyj 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 Oriola Oyj. Check out your portfolio center. Please also check ongoing floating volatility patterns of BOSTON BEER and Oriola Oyj.
Diversification Opportunities for BOSTON BEER and Oriola Oyj
-0.76 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between BOSTON and Oriola is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding BOSTON BEER A and Oriola Oyj in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oriola Oyj 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 Oriola Oyj. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oriola Oyj has no effect on the direction of BOSTON BEER i.e., BOSTON BEER and Oriola Oyj go up and down completely randomly.
Pair Corralation between BOSTON BEER and Oriola Oyj
Assuming the 90 days trading horizon BOSTON BEER A is expected to under-perform the Oriola Oyj. But the stock apears to be less risky and, when comparing its historical volatility, BOSTON BEER A is 1.04 times less risky than Oriola Oyj. The stock trades about -0.2 of its potential returns per unit of risk. The Oriola Oyj is currently generating about 0.38 of returns per unit of risk over similar time horizon. If you would invest 91.00 in Oriola Oyj on December 8, 2024 and sell it today you would earn a total of 16.00 from holding Oriola Oyj or generate 17.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
BOSTON BEER A vs. Oriola Oyj
Performance |
| Timeline |
| BOSTON BEER A |
| Oriola Oyj |
BOSTON BEER and Oriola Oyj Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BOSTON BEER and Oriola Oyj
The main advantage of trading using opposite BOSTON BEER and Oriola Oyj positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BOSTON BEER position performs unexpectedly, Oriola Oyj 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 Oriola Oyj will offset losses from the drop in Oriola Oyj's long position.| BOSTON BEER vs. Cass Information Systems | ||
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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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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