Correlation Between Boston Beer and Evolent Health
Can any of the company-specific risk be diversified away by investing in both Boston Beer and Evolent Health 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 Evolent Health 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 Evolent Health, you can compare the effects of market volatilities on Boston Beer and Evolent Health 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 Evolent Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Boston Beer and Evolent Health.
Diversification Opportunities for Boston Beer and Evolent Health
-0.93 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Boston and Evolent is -0.93. Overlapping area represents the amount of risk that can be diversified away by holding The Boston Beer and Evolent Health in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Evolent Health 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 Evolent Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Evolent Health has no effect on the direction of Boston Beer i.e., Boston Beer and Evolent Health go up and down completely randomly.
Pair Corralation between Boston Beer and Evolent Health
Assuming the 90 days trading horizon The Boston Beer is expected to generate 0.31 times more return on investment than Evolent Health. However, The Boston Beer is 3.23 times less risky than Evolent Health. It trades about 0.04 of its potential returns per unit of risk. Evolent Health is currently generating about -0.04 per unit of risk. If you would invest 27,540 in The Boston Beer on September 3, 2024 and sell it today you would earn a total of 2,140 from holding The Boston Beer or generate 7.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Boston Beer vs. Evolent Health
Performance |
| Timeline |
| Boston Beer |
| Evolent Health |
Boston Beer and Evolent Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Boston Beer and Evolent Health
The main advantage of trading using opposite Boston Beer and Evolent Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Boston Beer position performs unexpectedly, Evolent Health 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 Evolent Health will offset losses from the drop in Evolent Health's long position.| Boston Beer vs. Globe Trade Centre | Boston Beer vs. RETAIL FOOD GROUP | Boston Beer vs. SIDETRADE EO 1 | Boston Beer vs. The Trade Desk |
| Evolent Health vs. LIFEWAY FOODS | Evolent Health vs. UNIVERSAL MUSIC GROUP | Evolent Health vs. National Beverage Corp | Evolent Health vs. The Boston Beer |
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 Stocks Directory module to find actively traded stocks across global markets.
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