Correlation Between Boston Beer and Rogers Communications
Can any of the company-specific risk be diversified away by investing in both Boston Beer and Rogers Communications 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 Rogers Communications 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 Rogers Communications, you can compare the effects of market volatilities on Boston Beer and Rogers Communications 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 Rogers Communications. Check out your portfolio center. Please also check ongoing floating volatility patterns of Boston Beer and Rogers Communications.
Diversification Opportunities for Boston Beer and Rogers Communications
-0.76 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Boston and Rogers is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding The Boston Beer and Rogers Communications in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rogers Communications 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 Rogers Communications. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rogers Communications has no effect on the direction of Boston Beer i.e., Boston Beer and Rogers Communications go up and down completely randomly.
Pair Corralation between Boston Beer and Rogers Communications
Assuming the 90 days trading horizon The Boston Beer is expected to generate 1.01 times more return on investment than Rogers Communications. However, Boston Beer is 1.01 times more volatile than Rogers Communications. It trades about 0.22 of its potential returns per unit of risk. Rogers Communications is currently generating about -0.05 per unit of risk. If you would invest 27,920 in The Boston Beer on August 28, 2024 and sell it today you would earn a total of 2,020 from holding The Boston Beer or generate 7.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Boston Beer vs. Rogers Communications
Performance |
| Timeline |
| Boston Beer |
| Rogers Communications |
Boston Beer and Rogers Communications Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Boston Beer and Rogers Communications
The main advantage of trading using opposite Boston Beer and Rogers Communications positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Boston Beer position performs unexpectedly, Rogers Communications 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 Rogers Communications will offset losses from the drop in Rogers Communications' long position.| Boston Beer vs. Jacquet Metal Service | Boston Beer vs. CVS Health | Boston Beer vs. Diamondrock Hospitality Co | Boston Beer vs. Bumrungrad Hospital Public |
| Rogers Communications vs. AUSTEVOLL SEAFOOD | Rogers Communications vs. Scandinavian Tobacco Group | Rogers Communications vs. IMPERIAL TOBACCO | Rogers Communications vs. JAPAN TOBACCO UNSPADR12 |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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