Correlation Between Boston Beer and Mühlbauer Holding
Can any of the company-specific risk be diversified away by investing in both Boston Beer and Mühlbauer Holding 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 Mühlbauer Holding 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 Mhlbauer Holding AG, you can compare the effects of market volatilities on Boston Beer and Mühlbauer Holding 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 Mühlbauer Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Boston Beer and Mühlbauer Holding.
Diversification Opportunities for Boston Beer and Mühlbauer Holding
-0.82 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Boston and Mühlbauer is -0.82. Overlapping area represents the amount of risk that can be diversified away by holding The Boston Beer and Mhlbauer Holding AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mühlbauer Holding 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 Mühlbauer Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mühlbauer Holding has no effect on the direction of Boston Beer i.e., Boston Beer and Mühlbauer Holding go up and down completely randomly.
Pair Corralation between Boston Beer and Mühlbauer Holding
Assuming the 90 days trading horizon The Boston Beer is expected to generate 0.76 times more return on investment than Mühlbauer Holding. However, The Boston Beer is 1.32 times less risky than Mühlbauer Holding. It trades about 0.3 of its potential returns per unit of risk. Mhlbauer Holding AG is currently generating about -0.22 per unit of risk. If you would invest 26,580 in The Boston Beer on September 1, 2024 and sell it today you would earn a total of 2,440 from holding The Boston Beer or generate 9.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
The Boston Beer vs. Mhlbauer Holding AG
Performance |
| Timeline |
| Boston Beer |
| Mühlbauer Holding |
Boston Beer and Mühlbauer Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Boston Beer and Mühlbauer Holding
The main advantage of trading using opposite Boston Beer and Mühlbauer Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Boston Beer position performs unexpectedly, Mühlbauer Holding 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 Mühlbauer Holding will offset losses from the drop in Mühlbauer Holding's long position.| Boston Beer vs. Norwegian Air Shuttle | Boston Beer vs. Fair Isaac Corp | Boston Beer vs. Ming Le Sports | Boston Beer vs. PARKEN Sport Entertainment |
| Mühlbauer Holding vs. Westinghouse Air Brake | Mühlbauer Holding vs. Algonquin Power Utilities | Mühlbauer Holding vs. BOSTON BEER A | Mühlbauer Holding 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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