Correlation Between NH Foods and Boston Beer
Can any of the company-specific risk be diversified away by investing in both NH Foods 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 NH Foods and Boston Beer into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NH Foods Ltd and Boston Beer, you can compare the effects of market volatilities on NH Foods 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 NH Foods with a short position of Boston Beer. Check out your portfolio center. Please also check ongoing floating volatility patterns of NH Foods and Boston Beer.
Diversification Opportunities for NH Foods and Boston Beer
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between NIPMY and Boston is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding NH Foods Ltd and Boston Beer in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Boston Beer and NH Foods 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 NH Foods Ltd 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 NH Foods i.e., NH Foods and Boston Beer go up and down completely randomly.
Pair Corralation between NH Foods and Boston Beer
Assuming the 90 days horizon NH Foods Ltd is expected to generate 0.32 times more return on investment than Boston Beer. However, NH Foods Ltd is 3.14 times less risky than Boston Beer. It trades about 0.1 of its potential returns per unit of risk. Boston Beer is currently generating about 0.0 per unit of risk. If you would invest 1,203 in NH Foods Ltd on September 3, 2024 and sell it today you would earn a total of 497.00 from holding NH Foods Ltd or generate 41.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
NH Foods Ltd vs. Boston Beer
Performance |
| Timeline |
| NH Foods |
| Boston Beer |
NH Foods and Boston Beer Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NH Foods and Boston Beer
The main advantage of trading using opposite NH Foods and Boston Beer positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NH Foods 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.| NH Foods vs. Kellanova | NH Foods vs. Lancaster Colony | NH Foods vs. The A2 Milk | NH Foods vs. Altavoz Entertainment |
| 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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