Correlation Between BOSTON BEER and Saia
Can any of the company-specific risk be diversified away by investing in both BOSTON BEER and Saia 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 Saia 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 Saia Inc, you can compare the effects of market volatilities on BOSTON BEER and Saia 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 Saia. Check out your portfolio center. Please also check ongoing floating volatility patterns of BOSTON BEER and Saia.
Diversification Opportunities for BOSTON BEER and Saia
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between BOSTON and Saia is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding BOSTON BEER A and Saia Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Saia Inc 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 Saia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Saia Inc has no effect on the direction of BOSTON BEER i.e., BOSTON BEER and Saia go up and down completely randomly.
Pair Corralation between BOSTON BEER and Saia
Assuming the 90 days trading horizon BOSTON BEER is expected to generate 19.3 times less return on investment than Saia. But when comparing it to its historical volatility, BOSTON BEER A is 1.41 times less risky than Saia. It trades about 0.01 of its potential returns per unit of risk. Saia Inc is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 19,800 in Saia Inc on September 12, 2024 and sell it today you would earn a total of 29,000 from holding Saia Inc or generate 146.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
BOSTON BEER A vs. Saia Inc
Performance |
| Timeline |
| BOSTON BEER A |
| Saia Inc |
BOSTON BEER and Saia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BOSTON BEER and Saia
The main advantage of trading using opposite BOSTON BEER and Saia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BOSTON BEER position performs unexpectedly, Saia 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 Saia will offset losses from the drop in Saia's long position.| BOSTON BEER vs. Apple Inc | BOSTON BEER vs. Apple Inc | BOSTON BEER vs. Apple Inc | BOSTON BEER vs. Apple Inc |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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