Correlation Between Boston Beer and ZINC MEDIA
Can any of the company-specific risk be diversified away by investing in both Boston Beer and ZINC MEDIA 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 ZINC MEDIA 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 ZINC MEDIA GR, you can compare the effects of market volatilities on Boston Beer and ZINC MEDIA 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 ZINC MEDIA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Boston Beer and ZINC MEDIA.
Diversification Opportunities for Boston Beer and ZINC MEDIA
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Boston and ZINC is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding The Boston Beer and ZINC MEDIA GR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ZINC MEDIA GR 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 ZINC MEDIA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ZINC MEDIA GR has no effect on the direction of Boston Beer i.e., Boston Beer and ZINC MEDIA go up and down completely randomly.
Pair Corralation between Boston Beer and ZINC MEDIA
Assuming the 90 days trading horizon The Boston Beer is expected to under-perform the ZINC MEDIA. But the stock apears to be less risky and, when comparing its historical volatility, The Boston Beer is 1.07 times less risky than ZINC MEDIA. The stock trades about -0.04 of its potential returns per unit of risk. The ZINC MEDIA GR is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest 91.00 in ZINC MEDIA GR on November 9, 2024 and sell it today you would lose (21.00) from holding ZINC MEDIA GR or give up 23.08% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Boston Beer vs. ZINC MEDIA GR
Performance |
| Timeline |
| Boston Beer |
| ZINC MEDIA GR |
Boston Beer and ZINC MEDIA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Boston Beer and ZINC MEDIA
The main advantage of trading using opposite Boston Beer and ZINC MEDIA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Boston Beer position performs unexpectedly, ZINC MEDIA 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 ZINC MEDIA will offset losses from the drop in ZINC MEDIA's long position.| Boston Beer vs. Haverty Furniture Companies | Boston Beer vs. ARDAGH METAL PACDL 0001 | Boston Beer vs. DISTRICT METALS | Boston Beer vs. Stag Industrial |
| ZINC MEDIA vs. United Natural Foods | ZINC MEDIA vs. The Japan Steel | ZINC MEDIA vs. BC IRON | ZINC MEDIA vs. BG Foods |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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