Correlation Between Boston Beer and MEDICAL FACILITIES
Can any of the company-specific risk be diversified away by investing in both Boston Beer and MEDICAL FACILITIES 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 MEDICAL FACILITIES into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The Boston Beer and MEDICAL FACILITIES NEW, you can compare the effects of market volatilities on Boston Beer and MEDICAL FACILITIES 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 MEDICAL FACILITIES. Check out your portfolio center. Please also check ongoing floating volatility patterns of Boston Beer and MEDICAL FACILITIES.
Diversification Opportunities for Boston Beer and MEDICAL FACILITIES
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Boston and MEDICAL is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding The Boston Beer and MEDICAL FACILITIES NEW in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MEDICAL FACILITIES NEW 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 The Boston Beer are associated (or correlated) with MEDICAL FACILITIES. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MEDICAL FACILITIES NEW has no effect on the direction of Boston Beer i.e., Boston Beer and MEDICAL FACILITIES go up and down completely randomly.
Pair Corralation between Boston Beer and MEDICAL FACILITIES
Assuming the 90 days trading horizon The Boston Beer is expected to under-perform the MEDICAL FACILITIES. But the stock apears to be less risky and, when comparing its historical volatility, The Boston Beer is 1.34 times less risky than MEDICAL FACILITIES. The stock trades about 0.0 of its potential returns per unit of risk. The MEDICAL FACILITIES NEW is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 573.00 in MEDICAL FACILITIES NEW on September 4, 2024 and sell it today you would earn a total of 517.00 from holding MEDICAL FACILITIES NEW or generate 90.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Boston Beer vs. MEDICAL FACILITIES NEW
Performance |
| Timeline |
| Boston Beer |
| MEDICAL FACILITIES NEW |
Boston Beer and MEDICAL FACILITIES Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Boston Beer and MEDICAL FACILITIES
The main advantage of trading using opposite Boston Beer and MEDICAL FACILITIES positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Boston Beer position performs unexpectedly, MEDICAL FACILITIES 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 MEDICAL FACILITIES will offset losses from the drop in MEDICAL FACILITIES's long position.| Boston Beer vs. Heineken Holding NV | Boston Beer vs. Tsingtao Brewery | Boston Beer vs. Asahi Group Holdings | Boston Beer vs. Kirin Holdings |
| MEDICAL FACILITIES vs. Superior Plus Corp | MEDICAL FACILITIES vs. NMI Holdings | MEDICAL FACILITIES vs. Origin Agritech | MEDICAL FACILITIES 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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