Correlation Between Boston Beer and Hudson Technologies
Can any of the company-specific risk be diversified away by investing in both Boston Beer and Hudson Technologies 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 Hudson Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Boston Beer and Hudson Technologies, you can compare the effects of market volatilities on Boston Beer and Hudson Technologies 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 Hudson Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Boston Beer and Hudson Technologies.
Diversification Opportunities for Boston Beer and Hudson Technologies
-0.73 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Boston and Hudson is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding Boston Beer and Hudson Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hudson Technologies 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 Hudson Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hudson Technologies has no effect on the direction of Boston Beer i.e., Boston Beer and Hudson Technologies go up and down completely randomly.
Pair Corralation between Boston Beer and Hudson Technologies
Considering the 90-day investment horizon Boston Beer is expected to generate 0.77 times more return on investment than Hudson Technologies. However, Boston Beer is 1.3 times less risky than Hudson Technologies. It trades about -0.01 of its potential returns per unit of risk. Hudson Technologies is currently generating about -0.03 per unit of risk. If you would invest 37,970 in Boston Beer on August 24, 2024 and sell it today you would lose (6,690) from holding Boston Beer or give up 17.62% 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. Hudson Technologies
Performance |
| Timeline |
| Boston Beer |
| Hudson Technologies |
Boston Beer and Hudson Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Boston Beer and Hudson Technologies
The main advantage of trading using opposite Boston Beer and Hudson Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Boston Beer position performs unexpectedly, Hudson Technologies 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 Hudson Technologies will offset losses from the drop in Hudson Technologies' 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 |
| Hudson Technologies vs. Sensient Technologies | Hudson Technologies vs. Innospec | Hudson Technologies vs. H B Fuller | Hudson Technologies vs. Quaker Chemical |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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