Correlation Between BOSTON BEER and DELTA AIR
Can any of the company-specific risk be diversified away by investing in both BOSTON BEER and DELTA AIR 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 DELTA AIR 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 DELTA AIR LINES, you can compare the effects of market volatilities on BOSTON BEER and DELTA AIR 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 DELTA AIR. Check out your portfolio center. Please also check ongoing floating volatility patterns of BOSTON BEER and DELTA AIR.
Diversification Opportunities for BOSTON BEER and DELTA AIR
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between BOSTON and DELTA is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding BOSTON BEER A and DELTA AIR LINES in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DELTA AIR LINES 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 DELTA AIR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DELTA AIR LINES has no effect on the direction of BOSTON BEER i.e., BOSTON BEER and DELTA AIR go up and down completely randomly.
Pair Corralation between BOSTON BEER and DELTA AIR
Assuming the 90 days trading horizon BOSTON BEER is expected to generate 2.04 times less return on investment than DELTA AIR. But when comparing it to its historical volatility, BOSTON BEER A is 1.57 times less risky than DELTA AIR. It trades about 0.23 of its potential returns per unit of risk. DELTA AIR LINES is currently generating about 0.3 of returns per unit of risk over similar time horizon. If you would invest 5,130 in DELTA AIR LINES on August 29, 2024 and sell it today you would earn a total of 1,015 from holding DELTA AIR LINES or generate 19.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
BOSTON BEER A vs. DELTA AIR LINES
Performance |
| Timeline |
| BOSTON BEER A |
| DELTA AIR LINES |
BOSTON BEER and DELTA AIR Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BOSTON BEER and DELTA AIR
The main advantage of trading using opposite BOSTON BEER and DELTA AIR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BOSTON BEER position performs unexpectedly, DELTA AIR 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 DELTA AIR will offset losses from the drop in DELTA AIR's long position.| BOSTON BEER vs. COMPUTERSHARE | BOSTON BEER vs. Globe Trade Centre | BOSTON BEER vs. Consolidated Communications Holdings | BOSTON BEER vs. Canon Marketing Japan |
| DELTA AIR vs. FUYO GENERAL LEASE | DELTA AIR vs. Sixt Leasing SE | DELTA AIR vs. ALBIS LEASING AG | DELTA AIR vs. Gol Intelligent Airlines |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
Other Complementary Tools
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk |