Correlation Between Grocery Outlet and Boston Beer
Can any of the company-specific risk be diversified away by investing in both Grocery Outlet 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 Grocery Outlet and Boston Beer into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Grocery Outlet Holding and Boston Beer, you can compare the effects of market volatilities on Grocery Outlet 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 Grocery Outlet with a short position of Boston Beer. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grocery Outlet and Boston Beer.
Diversification Opportunities for Grocery Outlet and Boston Beer
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Grocery and Boston is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Grocery Outlet Holding and Boston Beer in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Boston Beer and Grocery Outlet 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 Grocery Outlet Holding 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 Grocery Outlet i.e., Grocery Outlet and Boston Beer go up and down completely randomly.
Pair Corralation between Grocery Outlet and Boston Beer
Allowing for the 90-day total investment horizon Grocery Outlet Holding is expected to under-perform the Boston Beer. In addition to that, Grocery Outlet is 1.04 times more volatile than Boston Beer. It trades about -0.01 of its total potential returns per unit of risk. Boston Beer is currently generating about 0.0 per unit of volatility. If you would invest 36,061 in Boston Beer on August 30, 2024 and sell it today you would lose (4,693) from holding Boston Beer or give up 13.01% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Grocery Outlet Holding vs. Boston Beer
Performance |
| Timeline |
| Grocery Outlet Holding |
| Boston Beer |
Grocery Outlet and Boston Beer Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Grocery Outlet and Boston Beer
The main advantage of trading using opposite Grocery Outlet and Boston Beer positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grocery Outlet 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.| Grocery Outlet vs. Village Super Market | Grocery Outlet vs. Sprouts Farmers Market | Grocery Outlet vs. Albertsons Companies | Grocery Outlet vs. Dingdong ADR |
| Boston Beer vs. Fomento Economico Mexicano | Boston Beer vs. Carlsberg AS | Boston Beer vs. Molson Coors Beverage | Boston Beer vs. Molson Coors Brewing |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
Other Complementary Tools
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum |