Correlation Between BOSTON BEER and Corporate Office
Can any of the company-specific risk be diversified away by investing in both BOSTON BEER and Corporate Office 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 Corporate Office 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 Corporate Office Properties, you can compare the effects of market volatilities on BOSTON BEER and Corporate Office 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 Corporate Office. Check out your portfolio center. Please also check ongoing floating volatility patterns of BOSTON BEER and Corporate Office.
Diversification Opportunities for BOSTON BEER and Corporate Office
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between BOSTON and Corporate is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding BOSTON BEER A and Corporate Office Properties in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Corporate Office Pro 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 Corporate Office. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Corporate Office Pro has no effect on the direction of BOSTON BEER i.e., BOSTON BEER and Corporate Office go up and down completely randomly.
Pair Corralation between BOSTON BEER and Corporate Office
Assuming the 90 days trading horizon BOSTON BEER A is expected to generate 1.17 times more return on investment than Corporate Office. However, BOSTON BEER is 1.17 times more volatile than Corporate Office Properties. It trades about 0.23 of its potential returns per unit of risk. Corporate Office Properties is currently generating about 0.07 per unit of risk. If you would invest 27,200 in BOSTON BEER A on August 28, 2024 and sell it today you would earn a total of 2,540 from holding BOSTON BEER A or generate 9.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
BOSTON BEER A vs. Corporate Office Properties
Performance |
| Timeline |
| BOSTON BEER A |
| Corporate Office Pro |
BOSTON BEER and Corporate Office Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BOSTON BEER and Corporate Office
The main advantage of trading using opposite BOSTON BEER and Corporate Office positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BOSTON BEER position performs unexpectedly, Corporate Office 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 Corporate Office will offset losses from the drop in Corporate Office'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 |
| Corporate Office vs. Superior Plus Corp | Corporate Office vs. NMI Holdings | Corporate Office vs. Origin Agritech | Corporate Office vs. SIVERS SEMICONDUCTORS AB |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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