Correlation Between BOSTON BEER and Kering SA
Can any of the company-specific risk be diversified away by investing in both BOSTON BEER and Kering SA 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 Kering SA 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 Kering SA, you can compare the effects of market volatilities on BOSTON BEER and Kering SA 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 Kering SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of BOSTON BEER and Kering SA.
Diversification Opportunities for BOSTON BEER and Kering SA
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between BOSTON and Kering is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding BOSTON BEER A and Kering SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kering SA 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 Kering SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kering SA has no effect on the direction of BOSTON BEER i.e., BOSTON BEER and Kering SA go up and down completely randomly.
Pair Corralation between BOSTON BEER and Kering SA
Assuming the 90 days trading horizon BOSTON BEER A is expected to generate 0.54 times more return on investment than Kering SA. However, BOSTON BEER A is 1.87 times less risky than Kering SA. It trades about 0.27 of its potential returns per unit of risk. Kering SA is currently generating about -0.06 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 | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
BOSTON BEER A vs. Kering SA
Performance |
| Timeline |
| BOSTON BEER A |
| Kering SA |
BOSTON BEER and Kering SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BOSTON BEER and Kering SA
The main advantage of trading using opposite BOSTON BEER and Kering SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BOSTON BEER position performs unexpectedly, Kering SA 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 Kering SA will offset losses from the drop in Kering SA'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 |
| Kering SA vs. Comba Telecom Systems | Kering SA vs. United Internet AG | Kering SA vs. Cogent Communications Holdings | Kering SA vs. BOSTON BEER A |
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.
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