Correlation Between Boston Beer and Cal Maine
Can any of the company-specific risk be diversified away by investing in both Boston Beer and Cal Maine 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 Cal Maine 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 Cal Maine Foods, you can compare the effects of market volatilities on Boston Beer and Cal Maine 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 Cal Maine. Check out your portfolio center. Please also check ongoing floating volatility patterns of Boston Beer and Cal Maine.
Diversification Opportunities for Boston Beer and Cal Maine
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Boston and Cal is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding The Boston Beer and Cal Maine Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cal Maine Foods 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 Cal Maine. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cal Maine Foods has no effect on the direction of Boston Beer i.e., Boston Beer and Cal Maine go up and down completely randomly.
Pair Corralation between Boston Beer and Cal Maine
Assuming the 90 days trading horizon The Boston Beer is expected to under-perform the Cal Maine. But the stock apears to be less risky and, when comparing its historical volatility, The Boston Beer is 1.68 times less risky than Cal Maine. The stock trades about -0.55 of its potential returns per unit of risk. The Cal Maine Foods is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 10,027 in Cal Maine Foods on November 1, 2024 and sell it today you would earn a total of 678.00 from holding Cal Maine Foods or generate 6.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Boston Beer vs. Cal Maine Foods
Performance |
| Timeline |
| Boston Beer |
| Cal Maine Foods |
Boston Beer and Cal Maine Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Boston Beer and Cal Maine
The main advantage of trading using opposite Boston Beer and Cal Maine positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Boston Beer position performs unexpectedly, Cal Maine 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 Cal Maine will offset losses from the drop in Cal Maine's long position.| Boston Beer vs. Semiconductor Manufacturing International | Boston Beer vs. British American Tobacco | Boston Beer vs. Elmos Semiconductor SE | Boston Beer vs. SLR Investment Corp |
| Cal Maine vs. SAN MIGUEL BREWERY | Cal Maine vs. The Boston Beer | Cal Maine vs. Yanzhou Coal Mining | Cal Maine vs. Monster Beverage Corp |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
Other Complementary Tools
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories |