Correlation Between Boston Beer and Ihuman
Can any of the company-specific risk be diversified away by investing in both Boston Beer and Ihuman 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 Ihuman into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Boston Beer and Ihuman Inc, you can compare the effects of market volatilities on Boston Beer and Ihuman 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 Ihuman. Check out your portfolio center. Please also check ongoing floating volatility patterns of Boston Beer and Ihuman.
Diversification Opportunities for Boston Beer and Ihuman
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between Boston and Ihuman is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Boston Beer and Ihuman Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ihuman 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 Ihuman. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ihuman Inc has no effect on the direction of Boston Beer i.e., Boston Beer and Ihuman go up and down completely randomly.
Pair Corralation between Boston Beer and Ihuman
Considering the 90-day investment horizon Boston Beer is expected to generate 0.6 times more return on investment than Ihuman. However, Boston Beer is 1.66 times less risky than Ihuman. It trades about 0.01 of its potential returns per unit of risk. Ihuman Inc is currently generating about -0.03 per unit of risk. If you would invest 32,262 in Boston Beer on August 31, 2024 and sell it today you would lose (638.00) from holding Boston Beer or give up 1.98% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.79% |
| Values | Daily Returns |
Boston Beer vs. Ihuman Inc
Performance |
| Timeline |
| Boston Beer |
| Ihuman Inc |
Boston Beer and Ihuman Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Boston Beer and Ihuman
The main advantage of trading using opposite Boston Beer and Ihuman positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Boston Beer position performs unexpectedly, Ihuman 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 Ihuman will offset losses from the drop in Ihuman'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 |
| Ihuman vs. Boqii Holding Limited | Ihuman vs. Lixiang Education Holding | Ihuman vs. Huize Holding | Ihuman vs. Kuke Music Holding |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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