Correlation Between Boston Beer and Mativ Holdings
Can any of the company-specific risk be diversified away by investing in both Boston Beer and Mativ Holdings 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 Mativ Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Boston Beer and Mativ Holdings, you can compare the effects of market volatilities on Boston Beer and Mativ Holdings 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 Mativ Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Boston Beer and Mativ Holdings.
Diversification Opportunities for Boston Beer and Mativ Holdings
-0.89 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Boston and Mativ is -0.89. Overlapping area represents the amount of risk that can be diversified away by holding Boston Beer and Mativ Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mativ Holdings 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 Mativ Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mativ Holdings has no effect on the direction of Boston Beer i.e., Boston Beer and Mativ Holdings go up and down completely randomly.
Pair Corralation between Boston Beer and Mativ Holdings
Considering the 90-day investment horizon Boston Beer is expected to generate 0.43 times more return on investment than Mativ Holdings. However, Boston Beer is 2.31 times less risky than Mativ Holdings. It trades about 0.02 of its potential returns per unit of risk. Mativ Holdings is currently generating about -0.12 per unit of risk. If you would invest 31,739 in Boston Beer on September 13, 2024 and sell it today you would earn a total of 136.00 from holding Boston Beer or generate 0.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Boston Beer vs. Mativ Holdings
Performance |
| Timeline |
| Boston Beer |
| Mativ Holdings |
Boston Beer and Mativ Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Boston Beer and Mativ Holdings
The main advantage of trading using opposite Boston Beer and Mativ Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Boston Beer position performs unexpectedly, Mativ Holdings 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 Mativ Holdings will offset losses from the drop in Mativ Holdings' 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 |
| Mativ Holdings vs. Orion Engineered Carbons | Mativ Holdings vs. Select Energy Services | Mativ Holdings vs. Perimeter Solutions SA | Mativ Holdings vs. FutureFuel Corp |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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