Correlation Between Boston Beer and ETFS Coffee
Can any of the company-specific risk be diversified away by investing in both Boston Beer and ETFS Coffee 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 ETFS Coffee 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 ETFS Coffee ETC, you can compare the effects of market volatilities on Boston Beer and ETFS Coffee 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 ETFS Coffee. Check out your portfolio center. Please also check ongoing floating volatility patterns of Boston Beer and ETFS Coffee.
Diversification Opportunities for Boston Beer and ETFS Coffee
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Boston and ETFS is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding The Boston Beer and ETFS Coffee ETC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ETFS Coffee ETC 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 ETFS Coffee. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ETFS Coffee ETC has no effect on the direction of Boston Beer i.e., Boston Beer and ETFS Coffee go up and down completely randomly.
Pair Corralation between Boston Beer and ETFS Coffee
Assuming the 90 days trading horizon The Boston Beer is expected to under-perform the ETFS Coffee. But the stock apears to be less risky and, when comparing its historical volatility, The Boston Beer is 1.39 times less risky than ETFS Coffee. The stock trades about -0.4 of its potential returns per unit of risk. The ETFS Coffee ETC is currently generating about 0.29 of returns per unit of risk over similar time horizon. If you would invest 5,250 in ETFS Coffee ETC on November 5, 2024 and sell it today you would earn a total of 738.00 from holding ETFS Coffee ETC or generate 14.06% 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. ETFS Coffee ETC
Performance |
| Timeline |
| Boston Beer |
| ETFS Coffee ETC |
Boston Beer and ETFS Coffee Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Boston Beer and ETFS Coffee
The main advantage of trading using opposite Boston Beer and ETFS Coffee positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Boston Beer position performs unexpectedly, ETFS Coffee 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 ETFS Coffee will offset losses from the drop in ETFS Coffee's long position.| Boston Beer vs. CHINA EDUCATION GROUP | Boston Beer vs. SBI Insurance Group | Boston Beer vs. Safety Insurance Group | Boston Beer vs. EMBARK EDUCATION LTD |
| ETFS Coffee vs. Molson Coors Beverage | ETFS Coffee vs. ARDAGH METAL PACDL 0001 | ETFS Coffee vs. Transport International Holdings | ETFS Coffee vs. GREENX METALS LTD |
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 Stocks Directory module to find actively traded stocks across global markets.
Other Complementary Tools
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges |