Correlation Between Boston Beer and Corporate Office
Can any of the company-specific risk be diversified away by investing in both Boston Beer and Corporate Office 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 Corporate Office 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 Corporate Office Properties, you can compare the effects of market volatilities on Boston Beer and Corporate Office 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 Corporate Office. Check out your portfolio center. Please also check ongoing floating volatility patterns of Boston Beer and Corporate Office.
Diversification Opportunities for Boston Beer and Corporate Office
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Boston and Corporate is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding The Boston Beer and Corporate Office Properties in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Corporate Office Pro 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 Corporate Office. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Corporate Office Pro has no effect on the direction of Boston Beer i.e., Boston Beer and Corporate Office go up and down completely randomly.
Pair Corralation between Boston Beer and Corporate Office
Assuming the 90 days trading horizon The Boston Beer is expected to generate 0.88 times more return on investment than Corporate Office. However, The Boston Beer is 1.14 times less risky than Corporate Office. It trades about 0.3 of its potential returns per unit of risk. Corporate Office Properties is currently generating about 0.16 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 Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Boston Beer vs. Corporate Office Properties
Performance |
| Timeline |
| Boston Beer |
| Corporate Office Pro |
Boston Beer and Corporate Office Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Boston Beer and Corporate Office
The main advantage of trading using opposite Boston Beer and Corporate Office positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Boston Beer position performs unexpectedly, Corporate Office 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 Corporate Office will offset losses from the drop in Corporate Office'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 |
| Corporate Office vs. Clean Energy Fuels | Corporate Office vs. BJs Restaurants | Corporate Office vs. FRACTAL GAMING GROUP | Corporate Office vs. ANGLER GAMING PLC |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
Other Complementary Tools
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk |