Correlation Between Boston Beer and CompuGroup Medical
Can any of the company-specific risk be diversified away by investing in both Boston Beer and CompuGroup Medical 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 CompuGroup Medical 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 CompuGroup Medical SE, you can compare the effects of market volatilities on Boston Beer and CompuGroup Medical 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 CompuGroup Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Boston Beer and CompuGroup Medical.
Diversification Opportunities for Boston Beer and CompuGroup Medical
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Boston and CompuGroup is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding The Boston Beer and CompuGroup Medical SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CompuGroup Medical 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 CompuGroup Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CompuGroup Medical has no effect on the direction of Boston Beer i.e., Boston Beer and CompuGroup Medical go up and down completely randomly.
Pair Corralation between Boston Beer and CompuGroup Medical
Assuming the 90 days trading horizon The Boston Beer is expected to generate 0.76 times more return on investment than CompuGroup Medical. However, The Boston Beer is 1.32 times less risky than CompuGroup Medical. It trades about -0.01 of its potential returns per unit of risk. CompuGroup Medical SE is currently generating about -0.03 per unit of risk. If you would invest 33,555 in The Boston Beer on October 12, 2024 and sell it today you would lose (6,895) from holding The Boston Beer or give up 20.55% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Boston Beer vs. CompuGroup Medical SE
Performance |
| Timeline |
| Boston Beer |
| CompuGroup Medical |
Boston Beer and CompuGroup Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Boston Beer and CompuGroup Medical
The main advantage of trading using opposite Boston Beer and CompuGroup Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Boston Beer position performs unexpectedly, CompuGroup Medical 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 CompuGroup Medical will offset losses from the drop in CompuGroup Medical's long position.| Boston Beer vs. Singapore Reinsurance | Boston Beer vs. Townsquare Media | Boston Beer vs. GigaMedia | Boston Beer vs. ANTA SPORTS PRODUCT |
| CompuGroup Medical vs. HOCHSCHILD MINING | CompuGroup Medical vs. Molson Coors Beverage | CompuGroup Medical vs. The Boston Beer | CompuGroup Medical vs. Media and Games |
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 CEOs Directory module to screen CEOs from public companies around the world.
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