Correlation Between Rogers Communications and Boston Beer
Can any of the company-specific risk be diversified away by investing in both Rogers Communications 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 Rogers Communications and Boston Beer into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Rogers Communications and The Boston Beer, you can compare the effects of market volatilities on Rogers Communications 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 Rogers Communications with a short position of Boston Beer. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rogers Communications and Boston Beer.
Diversification Opportunities for Rogers Communications and Boston Beer
-0.78 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Rogers and Boston is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding Rogers Communications and The Boston Beer in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Boston Beer and Rogers Communications 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 Rogers Communications 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 Rogers Communications i.e., Rogers Communications and Boston Beer go up and down completely randomly.
Pair Corralation between Rogers Communications and Boston Beer
Assuming the 90 days trading horizon Rogers Communications is expected to generate 7.46 times less return on investment than Boston Beer. But when comparing it to its historical volatility, Rogers Communications is 1.07 times less risky than Boston Beer. It trades about 0.03 of its potential returns per unit of risk. The Boston Beer is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 27,380 in The Boston Beer on August 31, 2024 and sell it today you would earn a total of 1,640 from holding The Boston Beer or generate 5.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Rogers Communications vs. The Boston Beer
Performance |
| Timeline |
| Rogers Communications |
| Boston Beer |
Rogers Communications and Boston Beer Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Rogers Communications and Boston Beer
The main advantage of trading using opposite Rogers Communications and Boston Beer positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rogers Communications 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.| Rogers Communications vs. Apple Inc | Rogers Communications vs. Apple Inc | Rogers Communications vs. Apple Inc | Rogers Communications vs. Apple Inc |
| Boston Beer vs. Heineken Holding NV | Boston Beer vs. Superior Plus Corp | Boston Beer vs. NMI Holdings | Boston Beer vs. Origin Agritech |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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