Correlation Between Boston Beer and MeVis Medical
Can any of the company-specific risk be diversified away by investing in both Boston Beer and MeVis 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 MeVis 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 MeVis Medical Solutions, you can compare the effects of market volatilities on Boston Beer and MeVis 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 MeVis Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Boston Beer and MeVis Medical.
Diversification Opportunities for Boston Beer and MeVis Medical
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Boston and MeVis is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding The Boston Beer and MeVis Medical Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MeVis Medical Solutions 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 MeVis Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MeVis Medical Solutions has no effect on the direction of Boston Beer i.e., Boston Beer and MeVis Medical go up and down completely randomly.
Pair Corralation between Boston Beer and MeVis Medical
Assuming the 90 days trading horizon The Boston Beer is expected to generate 1.02 times more return on investment than MeVis Medical. However, Boston Beer is 1.02 times more volatile than MeVis Medical Solutions. It trades about -0.02 of its potential returns per unit of risk. MeVis Medical Solutions is currently generating about -0.03 per unit of risk. If you would invest 29,380 in The Boston Beer on September 20, 2024 and sell it today you would lose (220.00) from holding The Boston Beer or give up 0.75% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Boston Beer vs. MeVis Medical Solutions
Performance |
| Timeline |
| Boston Beer |
| MeVis Medical Solutions |
Boston Beer and MeVis Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Boston Beer and MeVis Medical
The main advantage of trading using opposite Boston Beer and MeVis Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Boston Beer position performs unexpectedly, MeVis 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 MeVis Medical will offset losses from the drop in MeVis Medical's long position.| Boston Beer vs. Superior Plus Corp | Boston Beer vs. SIVERS SEMICONDUCTORS AB | Boston Beer vs. NorAm Drilling AS | Boston Beer vs. Norsk Hydro ASA |
| MeVis Medical vs. The Boston Beer | MeVis Medical vs. PARKEN Sport Entertainment | MeVis Medical vs. United Breweries Co | MeVis Medical vs. Seven West Media |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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