Correlation Between Genting Singapore and Boston Beer
Can any of the company-specific risk be diversified away by investing in both Genting Singapore and Boston Beer 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 Genting Singapore and Boston Beer into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Genting Singapore PLC and Boston Beer, you can compare the effects of market volatilities on Genting Singapore and Boston Beer 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 Genting Singapore with a short position of Boston Beer. Check out your portfolio center. Please also check ongoing floating volatility patterns of Genting Singapore and Boston Beer.
Diversification Opportunities for Genting Singapore and Boston Beer
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Genting and Boston is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Genting Singapore PLC and Boston Beer in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Boston Beer and Genting Singapore 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 Genting Singapore PLC are associated (or correlated) with Boston Beer. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Boston Beer has no effect on the direction of Genting Singapore i.e., Genting Singapore and Boston Beer go up and down completely randomly.
Pair Corralation between Genting Singapore and Boston Beer
Assuming the 90 days horizon Genting Singapore PLC is expected to generate 3.2 times more return on investment than Boston Beer. However, Genting Singapore is 3.2 times more volatile than Boston Beer. It trades about 0.02 of its potential returns per unit of risk. Boston Beer is currently generating about -0.44 per unit of risk. If you would invest 2,751 in Genting Singapore PLC on October 21, 2024 and sell it today you would lose (21.00) from holding Genting Singapore PLC or give up 0.76% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Genting Singapore PLC vs. Boston Beer
Performance |
| Timeline |
| Genting Singapore PLC |
| Boston Beer |
Genting Singapore and Boston Beer Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Genting Singapore and Boston Beer
The main advantage of trading using opposite Genting Singapore and Boston Beer positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Genting Singapore position performs unexpectedly, Boston Beer 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 Boston Beer will offset losses from the drop in Boston Beer's long position.| Genting Singapore vs. Boston Beer | Genting Singapore vs. SNDL Inc | Genting Singapore vs. Oatly Group AB | Genting Singapore vs. BK Technologies |
| Boston Beer vs. Anheuser Busch Inbev | Boston Beer vs. Molson Coors Beverage | Boston Beer vs. Heineken NV | Boston Beer vs. Ambev SA ADR |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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