Correlation Between Boston Beer and Hain Celestial
Can any of the company-specific risk be diversified away by investing in both Boston Beer and Hain Celestial 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 Hain Celestial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Boston Beer and The Hain Celestial, you can compare the effects of market volatilities on Boston Beer and Hain Celestial 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 Hain Celestial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Boston Beer and Hain Celestial.
Diversification Opportunities for Boston Beer and Hain Celestial
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Boston and Hain is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Boston Beer and The Hain Celestial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hain Celestial 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 Hain Celestial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hain Celestial has no effect on the direction of Boston Beer i.e., Boston Beer and Hain Celestial go up and down completely randomly.
Pair Corralation between Boston Beer and Hain Celestial
Considering the 90-day investment horizon Boston Beer is expected to generate 0.73 times more return on investment than Hain Celestial. However, Boston Beer is 1.36 times less risky than Hain Celestial. It trades about -0.02 of its potential returns per unit of risk. The Hain Celestial is currently generating about -0.07 per unit of risk. If you would invest 37,500 in Boston Beer on November 2, 2024 and sell it today you would lose (12,292) from holding Boston Beer or give up 32.78% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Boston Beer vs. The Hain Celestial
Performance |
| Timeline |
| Boston Beer |
| Hain Celestial |
Boston Beer and Hain Celestial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Boston Beer and Hain Celestial
The main advantage of trading using opposite Boston Beer and Hain Celestial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Boston Beer position performs unexpectedly, Hain Celestial 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 Hain Celestial will offset losses from the drop in Hain Celestial'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 |
| Hain Celestial vs. J J Snack | Hain Celestial vs. Lancaster Colony | Hain Celestial vs. Treehouse Foods | Hain Celestial vs. Simply Good Foods |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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