Correlation Between Boston Beer and Corpay
Can any of the company-specific risk be diversified away by investing in both Boston Beer and Corpay 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 Corpay into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Boston Beer and Corpay Inc, you can compare the effects of market volatilities on Boston Beer and Corpay 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 Corpay. Check out your portfolio center. Please also check ongoing floating volatility patterns of Boston Beer and Corpay.
Diversification Opportunities for Boston Beer and Corpay
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Boston and Corpay is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Boston Beer and Corpay Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Corpay Inc 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 Corpay. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Corpay Inc has no effect on the direction of Boston Beer i.e., Boston Beer and Corpay go up and down completely randomly.
Pair Corralation between Boston Beer and Corpay
Considering the 90-day investment horizon Boston Beer is expected to under-perform the Corpay. In addition to that, Boston Beer is 1.47 times more volatile than Corpay Inc. It trades about -0.01 of its total potential returns per unit of risk. Corpay Inc is currently generating about 0.11 per unit of volatility. If you would invest 25,606 in Corpay Inc on September 2, 2024 and sell it today you would earn a total of 12,512 from holding Corpay Inc or generate 48.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Boston Beer vs. Corpay Inc
Performance |
| Timeline |
| Boston Beer |
| Corpay Inc |
Boston Beer and Corpay Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Boston Beer and Corpay
The main advantage of trading using opposite Boston Beer and Corpay positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Boston Beer position performs unexpectedly, Corpay 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 Corpay will offset losses from the drop in Corpay'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 |
| Corpay vs. Ispire Technology Common | Corpay vs. Boston Beer | Corpay vs. Nabors Industries | Corpay vs. Scandinavian Tobacco 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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