Correlation Between Boston Beer and Banzai International
Can any of the company-specific risk be diversified away by investing in both Boston Beer and Banzai International 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 Boston Beer and Banzai International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Boston Beer and Banzai International, you can compare the effects of market volatilities on Boston Beer and Banzai International 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 Boston Beer with a short position of Banzai International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Boston Beer and Banzai International.
Diversification Opportunities for Boston Beer and Banzai International
-0.79 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Boston and Banzai is -0.79. Overlapping area represents the amount of risk that can be diversified away by holding Boston Beer and Banzai International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Banzai International and Boston Beer 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 Boston Beer are associated (or correlated) with Banzai International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Banzai International has no effect on the direction of Boston Beer i.e., Boston Beer and Banzai International go up and down completely randomly.
Pair Corralation between Boston Beer and Banzai International
Considering the 90-day investment horizon Boston Beer is expected to generate 0.23 times more return on investment than Banzai International. However, Boston Beer is 4.28 times less risky than Banzai International. It trades about 0.01 of its potential returns per unit of risk. Banzai International is currently generating about -0.07 per unit of risk. If you would invest 33,434 in Boston Beer on September 12, 2024 and sell it today you would lose (1,538) from holding Boston Beer or give up 4.6% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Boston Beer vs. Banzai International
Performance |
| Timeline |
| Boston Beer |
| Banzai International |
Boston Beer and Banzai International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Boston Beer and Banzai International
The main advantage of trading using opposite Boston Beer and Banzai International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Boston Beer position performs unexpectedly, Banzai International 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 Banzai International will offset losses from the drop in Banzai International's long position.| Boston Beer vs. Anheuser Busch Inbev | Boston Beer vs. Molson Coors Beverage | Boston Beer vs. Heineken NV | Boston Beer vs. Ambev SA ADR |
| Banzai International vs. Molson Coors Brewing | Banzai International vs. National Beverage Corp | Banzai International vs. Boston Beer | Banzai International vs. Alaska Air Group |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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