Correlation Between Boston Beer and Canlan Ice
Can any of the company-specific risk be diversified away by investing in both Boston Beer and Canlan Ice 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 Canlan Ice into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Boston Beer and Canlan Ice Sports, you can compare the effects of market volatilities on Boston Beer and Canlan Ice 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 Canlan Ice. Check out your portfolio center. Please also check ongoing floating volatility patterns of Boston Beer and Canlan Ice.
Diversification Opportunities for Boston Beer and Canlan Ice
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Boston and Canlan is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Boston Beer and Canlan Ice Sports in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Canlan Ice Sports 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 Canlan Ice. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Canlan Ice Sports has no effect on the direction of Boston Beer i.e., Boston Beer and Canlan Ice go up and down completely randomly.
Pair Corralation between Boston Beer and Canlan Ice
If you would invest 29,494 in Boston Beer on September 2, 2024 and sell it today you would earn a total of 2,130 from holding Boston Beer or generate 7.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Boston Beer vs. Canlan Ice Sports
Performance |
| Timeline |
| Boston Beer |
| Canlan Ice Sports |
Boston Beer and Canlan Ice Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Boston Beer and Canlan Ice
The main advantage of trading using opposite Boston Beer and Canlan Ice positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Boston Beer position performs unexpectedly, Canlan Ice 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 Canlan Ice will offset losses from the drop in Canlan Ice's long position.| Boston Beer vs. Compania Cervecerias Unidas | Boston Beer vs. Molson Coors Brewing | Boston Beer vs. Suntory Beverage Food | Boston Beer vs. Carlsberg AS |
| Canlan Ice vs. Kite Realty Group | Canlan Ice vs. Alaska Air Group | Canlan Ice vs. Stepstone Group | Canlan Ice vs. Tencent Music Entertainment |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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