Correlation Between Boston Beer and Airbus SE
Can any of the company-specific risk be diversified away by investing in both Boston Beer and Airbus SE 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 Airbus SE 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 Airbus SE, you can compare the effects of market volatilities on Boston Beer and Airbus SE 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 Airbus SE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Boston Beer and Airbus SE.
Diversification Opportunities for Boston Beer and Airbus SE
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Boston and Airbus is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding The Boston Beer and Airbus SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Airbus SE 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 Airbus SE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Airbus SE has no effect on the direction of Boston Beer i.e., Boston Beer and Airbus SE go up and down completely randomly.
Pair Corralation between Boston Beer and Airbus SE
Assuming the 90 days trading horizon The Boston Beer is expected to under-perform the Airbus SE. In addition to that, Boston Beer is 1.44 times more volatile than Airbus SE. It trades about -0.17 of its total potential returns per unit of risk. Airbus SE is currently generating about 0.12 per unit of volatility. If you would invest 15,472 in Airbus SE on October 7, 2024 and sell it today you would earn a total of 394.00 from holding Airbus SE or generate 2.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Boston Beer vs. Airbus SE
Performance |
| Timeline |
| Boston Beer |
| Airbus SE |
Boston Beer and Airbus SE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Boston Beer and Airbus SE
The main advantage of trading using opposite Boston Beer and Airbus SE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Boston Beer position performs unexpectedly, Airbus SE 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 Airbus SE will offset losses from the drop in Airbus SE's long position.| Boston Beer vs. HEINEKEN SP ADR | Boston Beer vs. Heineken Holding NV | Boston Beer vs. Superior Plus Corp | Boston Beer vs. NMI Holdings |
| Airbus SE vs. Beazer Homes USA | Airbus SE vs. Minerals Technologies | Airbus SE vs. Agilent Technologies | Airbus SE vs. OFFICE DEPOT |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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