Correlation Between RETAIL FOOD and BOSTON BEER
Can any of the company-specific risk be diversified away by investing in both RETAIL FOOD 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 RETAIL FOOD and BOSTON BEER into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between RETAIL FOOD GROUP and BOSTON BEER A , you can compare the effects of market volatilities on RETAIL FOOD 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 RETAIL FOOD with a short position of BOSTON BEER. Check out your portfolio center. Please also check ongoing floating volatility patterns of RETAIL FOOD and BOSTON BEER.
Diversification Opportunities for RETAIL FOOD and BOSTON BEER
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between RETAIL and BOSTON is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding RETAIL FOOD GROUP and BOSTON BEER A in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BOSTON BEER A and RETAIL FOOD 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 RETAIL FOOD GROUP 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 A has no effect on the direction of RETAIL FOOD i.e., RETAIL FOOD and BOSTON BEER go up and down completely randomly.
Pair Corralation between RETAIL FOOD and BOSTON BEER
Assuming the 90 days trading horizon RETAIL FOOD GROUP is expected to under-perform the BOSTON BEER. In addition to that, RETAIL FOOD is 1.97 times more volatile than BOSTON BEER A . It trades about -0.25 of its total potential returns per unit of risk. BOSTON BEER A is currently generating about -0.23 per unit of volatility. If you would invest 29,460 in BOSTON BEER A on October 10, 2024 and sell it today you would lose (2,000) from holding BOSTON BEER A or give up 6.79% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
RETAIL FOOD GROUP vs. BOSTON BEER A
Performance |
| Timeline |
| RETAIL FOOD GROUP |
| BOSTON BEER A |
RETAIL FOOD and BOSTON BEER Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with RETAIL FOOD and BOSTON BEER
The main advantage of trading using opposite RETAIL FOOD and BOSTON BEER positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if RETAIL FOOD 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.| RETAIL FOOD vs. MOLSON RS BEVERAGE | RETAIL FOOD vs. EBRO FOODS | RETAIL FOOD vs. TYSON FOODS A | RETAIL FOOD vs. MagnaChip Semiconductor Corp |
| BOSTON BEER vs. INDOFOOD AGRI RES | BOSTON BEER vs. Automatic Data Processing | BOSTON BEER vs. Linedata Services SA | BOSTON BEER vs. INFORMATION SVC GRP |
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.
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